As filed with the Securities and Exchange Commission on June 10, 2019
1933 Act File No. 333-150525
1940 Act File No. 811-22201
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20543
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 | ☒ | |||
Pre-Effective Amendment No. | ☐ | |||
Post-Effective Amendment No. 243 | ☒ |
and/or
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 | ☒ | |||
Amendment No. 245 | ☒ |
(Check appropriate box or boxes.)
DIREXION SHARES ETF TRUST
(Exact name of Registrant as Specified in Charter)
1301 Avenue of the Americas (6 th Avenue), 28 th Floor
New York, New York 10019
(Address of Principal Executive Office) (Zip Code)
Registrants Telephone Number, including Area Code: (646) 572-3390
Daniel D. ONeill, Chief Executive Officer
1301 Avenue of the Americas (6 th Avenue), 28 th Floor
New York, New York 10019
(Name and Address of Agent for Service)
Copy to:
Angela Brickl Direxion Advisors, LLC 1301 Avenue of the Americas (6 th Avenue) 28 th Floor |
Stacy L. Fuller K&L Gates LLP 1601 K Street, NW Washington, DC 20006 |
|
New York, New York 10019 |
It is proposed that this filing will become effective (check appropriate box)
☐ |
immediately upon filing pursuant to paragraph (b) |
☐ |
On (date) pursuant to paragraph (b) |
☐ |
60 days after filing pursuant to paragraph (a)(1) |
☐ |
On (date) pursuant to paragraph (a)(1) |
☒ |
75 days after filing pursuant to paragraph (a)(2) |
☐ |
on (date) pursuant to paragraph (a)(2) of Rule 485. |
If appropriate, check the following box:
☐ |
This post-effective amendment designates a new effective date for a previously filed post-effective amendment. |
DIREXION SHARES ETF TRUST
CONTENTS OF REGISTRATION STATEMENT
This registration document is comprised of the following:
Cover Sheet;
Contents of Registration Statement:
Prospectus and Statement of Additional Information for the Funds listed on Appendix A;
Part C of Form N-1A;
Signature Page; and
Exhibit.
Appendix A
Direxion Daily MSCI Brazil Bear 3X Shares
Direxion Daily MSCI India Bear 3X Shares
Direxion Daily MSCI South Korea Bear 3X Shares
Direxion Daily MSCI Turkey Bull 3X Shares
Direxion Daily S&P 500 ® High Beta Bull 3X Shares
Direxion Daily S&P 500 ® High Beta Bear 3X Shares
Direxion Daily Homebuilders & Supplies Bear 3X Shares
Direxion Daily Dow Jones Internet Bull 3X Shares
Direxion Daily Dow Jones Internet Bear 3X Shares
Direxion Daily Retail Bear 3X Shares
1301 Avenue of the Americas (6th Avenue), 28th Floor | New York, New York 10019 | 866-476-7523 |
3X Bull Funds | 3X Bear Funds |
Direxion Daily MSCI Brazil Bear 3X Shares ( ) | |
Direxion Daily MSCI India Bear 3X Shares ( ) | |
Direxion Daily MSCI South Korea Bear 3X Shares ( ) | |
Direxion Daily MSCI Turkey Bull 3X Shares ( ) | |
Direxion Daily S&P 500 ® High Beta Bull 3X Shares ( ) | Direxion Daily S&P 500 ® High Beta Bear 3X Shares ( ) |
Direxion Daily Homebuilders & Supplies Bear 3X Shares ( ) | |
Direxion Daily Dow Jones Internet Bull 3X Shares ( ) | Direxion Daily Dow Jones Internet Bear 3X Shares ( ) |
Direxion Daily Retail Bear 3X Shares ( ) | |
(1) | The Funds pursue daily leveraged investment objectives, which means that the Funds are riskier than alternatives that do not use leverage because the Funds magnify the performance of their underlying index. |
(2) | Each Bear Fund pursues a daily leveraged investment objective that is inverse to the performance of its underlying index, a result opposite of most mutual funds and exchange-traded funds. |
(3) | The pursuit of daily investment objectives means that the return of a Fund for a period longer than a full trading day will be the product of a series of daily leveraged returns for each trading day during the relevant period. As a consequence, especially in periods of market volatility, the volatility of the underlying index may affect a Fund’s return as much as, or more than, the return of the underlying index. Further, the return for investors that invest for periods less than a full trading day will not be the product of the return of a Fund’s stated daily leveraged investment objective and the performance of the underlying index for the full trading day. During periods of high volatility, the Funds may not perform as expected and the Funds may have losses when an investor may have expected gains if the Funds are held for a period that is different than one trading day. |
(a) | understand the risks associated with the use of leverage; |
(b) | understand the consequences of seeking daily leveraged investment results; |
(c) | for a Bear Fund, understand the risk of shorting; and |
(d) | intend to actively monitor and manage their investments. |
(1) | Estimated for the Fund's current fiscal year. |
(2) | Rafferty Asset Management, LLC (“Rafferty” or the “Adviser”) has entered into an Operating Expense Limitation Agreement with the Fund. Under the Operating Expense Limitation Agreement, Rafferty has contractually agreed to waive all or a portion of its management fee and/or reimburse the Fund for Other Expenses through September 1, 2020, to the extent that the Fund’s Total Annual Fund Operating Expenses exceed 0.95% of the Fund’s average daily net assets (excluding, as applicable, among other expenses, taxes, swap financing and related costs, acquired fund fees and expenses, dividends or interest on short positions, other interest expenses, brokerage commissions and extraordinary expenses). |
Any expense waiver or reimbursement is subject to recoupment by the Adviser within the following three years only if Total Annual Fund Operating Expenses fall below the lesser of this percentage limitation and any percentage limitation in place at the time. This agreement may be terminated or revised at any time with the consent of the Board of Trustees. |
1 Year | 3 Years |
$[ ] | $[ ] |
1 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 2 |
3 | Direxion Shares ETF Trust Prospectus |
• | Swap Agreements. Swap agreements are entered into primarily with major global financial institutions for a specified period which may range from one day to more than one year. In a standard swap transaction, two parties agree to exchange the return (or differentials in rates of return) earned or realized on particular predetermined reference assets or underlying securities or instruments. The gross return to be exchanged or swapped between the parties is calculated based on a notional amount or the return on or change in value of a particular dollar |
amount invested in a basket of securities representing a particular index or an ETF that seeks to track an index. | |
If the Index has a dramatic move that causes a material decline in the Fund’s net assets, the terms of a swap agreement between the Fund and its counterparty may permit the counterparty to immediately close out the swap transaction with the Fund. In that event, the Fund may be unable to enter into another swap agreement or invest in other derivatives to achieve exposure consistent with the Fund’s investment objective. This may prevent the Fund from achieving its inverse leveraged investment objective, even if the Index later reverses all or a portion of its movement. | |
• | Futures Contracts. Futures contracts are typically exchange-traded contracts that call for the future delivery of an asset at a certain price and date, or cash settlement of the terms of the contract. There may be an imperfect correlation between the changes in market value of the securities held by the Fund and the prices of futures contracts. There may not be a liquid secondary market for the futures contracts and the Fund may not be able to enter into a closing transaction. Exchanges may also limit the number of positions that can be held or controlled by the Fund or the Adviser, thus limiting the ability of the Fund to implement its inverse leveraged investment strategy. Futures markets are highly volatile and the use of futures may increase the Fund’s volatility. The value of an investment in the Fund may change quickly and without warning. |
Direxion Shares ETF Trust Prospectus | 4 |
5 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 6 |
7 | Direxion Shares ETF Trust Prospectus |
Portfolio Managers | Years of Service with the Fund | Primary Title |
Paul Brigandi | Since Inception | Portfolio Manager |
Tony Ng | Since Inception | Portfolio Manager |
Direxion Shares ETF Trust Prospectus | 8 |
(1) | Estimated for the Fund's current fiscal year. |
(2) | Rafferty Asset Management, LLC (“Rafferty” or the “Adviser”) has entered into an Operating Expense Limitation Agreement with the Fund. Under the Operating Expense Limitation Agreement, Rafferty has contractually agreed to waive all or a portion of its management fee and/or reimburse the Fund for Other Expenses through September 1, 2020, to the extent that the Fund’s Total Annual Fund Operating Expenses exceed 0.95% of the Fund’s average daily net assets (excluding, as applicable, among other expenses, taxes, swap financing and related costs, acquired fund fees and expenses, dividends or interest on short positions, other interest expenses, brokerage commissions and extraordinary expenses). |
Any expense waiver or reimbursement is subject to recoupment by the Adviser within the following three years only if Total Annual Fund Operating Expenses fall below the lesser of this percentage limitation and any percentage limitation in place at the time. This agreement may be terminated or revised at any time with the consent of the Board of Trustees. |
1 Year | 3 Years |
$[ ] | $[ ] |
9 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 10 |
11 | Direxion Shares ETF Trust Prospectus |
• | Swap Agreements. Swap agreements are entered into primarily with major global financial institutions for a specified period which may range from one day to more than one year. In a standard swap transaction, two parties agree to exchange the return (or differentials in rates of return) earned or realized on particular predetermined reference assets or underlying securities or instruments. The gross return to be exchanged or swapped between the parties is calculated based on a notional amount or the return on or change in value of a particular dollar amount invested in a basket of securities representing a particular index or an ETF that seeks to track an index. |
If the Index has a dramatic move that causes a material decline in the Fund’s net assets, the terms of a swap agreement between the Fund and its counterparty may permit the counterparty to immediately close out the swap transaction with the Fund. In that event, the Fund may be unable to enter into another swap agreement or invest |
• | Futures Contracts. Futures contracts are typically exchange-traded contracts that call for the future delivery of an asset at a certain price and date, or cash settlement of the terms of the contract. There may be an imperfect correlation between the changes in market value of the securities held by the Fund and the prices of futures contracts. There may not be a liquid secondary market for the futures contracts and the Fund may not be able to enter into a closing transaction. Exchanges may also limit the number of positions that can be held or controlled by the Fund or the Adviser, thus limiting the ability of the Fund to implement its inverse leveraged investment strategy. Futures markets are highly volatile and the use of futures may increase the Fund’s volatility. The value of an investment in the Fund may change quickly and without warning. |
Direxion Shares ETF Trust Prospectus | 12 |
13 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 14 |
15 | Direxion Shares ETF Trust Prospectus |
Portfolio Managers | Years of Service with the Fund | Primary Title |
Paul Brigandi | Since Inception | Portfolio Manager |
Tony Ng | Since Inception | Portfolio Manager |
Direxion Shares ETF Trust Prospectus | 16 |
(1) | Estimated for the Fund's current fiscal year. |
(2) | Rafferty Asset Management, LLC (“Rafferty” or the “Adviser”) has entered into an Operating Expense Limitation Agreement with the Fund. Under the Operating Expense Limitation Agreement, Rafferty has contractually agreed to waive all or a portion of its management fee and/or reimburse the Fund for Other Expenses through September 1, 2020, to the extent that the Fund’s Total Annual Fund Operating Expenses exceed 0.95% of the Fund’s average daily net assets (excluding, as applicable, among other expenses, taxes, swap financing and related costs, acquired fund fees and expenses, dividends or interest on short positions, other interest expenses, brokerage commissions and extraordinary expenses). |
Any expense waiver or reimbursement is subject to recoupment by the Adviser within the following three years only if Total Annual Fund Operating Expenses fall below the lesser of this percentage limitation and any percentage limitation in place at the time. This agreement may be terminated or revised at any time with the consent of the Board of Trustees. |
1 Year | 3 Years |
$[ ] | $[ ] |
17 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 18 |
19 | Direxion Shares ETF Trust Prospectus |
• | Swap Agreements. Swap agreements are entered into primarily with major global financial institutions for a specified period which may range from one day to more than one year. In a standard swap transaction, two parties agree to exchange the return (or differentials in rates of return) earned or realized on particular predetermined reference assets or underlying securities or instruments. The gross return to be exchanged or swapped between the parties is calculated based on a notional amount or the return on or change in value of a particular dollar amount invested in a basket of securities representing a particular index or an ETF that seeks to track an index. |
If the Index has a dramatic move that causes a material decline in the Fund’s net assets, the terms of a swap agreement between the Fund and its counterparty may |
• | Futures Contracts. Futures contracts are typically exchange-traded contracts that call for the future delivery of an asset at a certain price and date, or cash settlement of the terms of the contract. There may be an imperfect correlation between the changes in market value of the securities held by the Fund and the prices of futures contracts. There may not be a liquid secondary market for the futures contracts and the Fund may not be able to enter into a closing transaction. Exchanges may also limit the number of positions that can be held or controlled by the Fund or the Adviser, thus limiting the ability of the Fund to implement its inverse leveraged investment strategy. Futures markets are highly volatile and the use of futures may increase the Fund’s volatility. The value of an investment in the Fund may change quickly and without warning. |
Direxion Shares ETF Trust Prospectus | 20 |
21 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 22 |
23 | Direxion Shares ETF Trust Prospectus |
Portfolio Managers | Years of Service with the Fund | Primary Title |
Paul Brigandi | Since Inception | Portfolio Manager |
Tony Ng | Since Inception | Portfolio Manager |
Direxion Shares ETF Trust Prospectus | 24 |
(1) | Estimated for the Fund's current fiscal year. |
(2) | Rafferty Asset Management, LLC (“Rafferty” or the “Adviser”) has entered into an Operating Expense Limitation Agreement with the Fund. Under the Operating Expense Limitation Agreement, Rafferty has contractually agreed to waive all or a portion of its management fee and/or reimburse the Fund for Other Expenses through September 1, 2020, to the extent that the Fund’s Total Annual Fund Operating Expenses exceed 0.95% of the Fund’s average daily net assets (excluding, as applicable, among other expenses, taxes, swap financing and related costs, acquired fund fees and expenses, dividends or interest on short positions, other interest expenses, brokerage commissions and extraordinary expenses). |
Any expense waiver or reimbursement is subject to recoupment by the Adviser within the following three years only if Total Annual Fund Operating Expenses fall below the lesser of this percentage limitation and any percentage limitation in place at the time. This agreement may be terminated or revised at any time with the consent of the Board of Trustees. |
1 Year | 3 Years |
$[ ] | $[ ] |
25 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 26 |
27 | Direxion Shares ETF Trust Prospectus |
• | Swap Agreements. Swap agreements are entered into primarily with major global financial institutions for a specified period which may range from one day to more than one year. In a standard swap transaction, two parties agree to exchange the return (or differentials in rates of return) earned or realized on particular predetermined reference assets or underlying securities or instruments. The gross return to be exchanged or swapped between the parties is calculated based on a notional amount or the return on or change in value of a particular dollar amount invested in a basket of securities representing a particular index or an ETF that seeks to track an index. |
If the Index has a dramatic move that causes a material decline in the Fund’s net assets, the terms of a swap agreement between the Fund and its counterparty may permit the counterparty to immediately close out the swap transaction with the Fund. In that event, the Fund may be unable to enter into another swap agreement or invest in other derivatives to achieve exposure consistent with the Fund’s investment objective. This may prevent the Fund from achieving its leveraged investment objective, even if the Index later reverses all or a portion of its movement. | |
• | Futures Contracts. Futures contracts are typically exchange-traded contracts that call for the future delivery of an asset at a certain price and date, or cash settlement of the terms of the contract. There may be an imperfect correlation between the changes in market value of the securities held by the Fund and the prices of futures contracts. There may not be a liquid secondary market for the futures contracts and the Fund may not be able to enter into a closing transaction. Exchanges may also limit the number of positions that can be held or controlled by the Fund or the Adviser, thus limiting the ability of the Fund to implement its leveraged investment strategy. Futures markets are highly volatile and the use of futures may increase the Fund’s volatility. The value of an investment in the Fund may change quickly and without warning. |
Direxion Shares ETF Trust Prospectus | 28 |
29 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 30 |
31 | Direxion Shares ETF Trust Prospectus |
Portfolio Managers | Years of Service with the Fund | Primary Title |
Paul Brigandi | Since Inception | Portfolio Manager |
Tony Ng | Since Inception | Portfolio Manager |
Direxion Shares ETF Trust Prospectus | 32 |
(1) | Estimated for the Fund's current fiscal year. |
(2) | Rafferty Asset Management, LLC (“Rafferty” or the “Adviser”) has entered into an Operating Expense Limitation Agreement with the Fund. Under the Operating Expense Limitation Agreement, Rafferty has contractually agreed to waive all or a portion of its management fee and/or reimburse the Fund for Other Expenses through September 1, 2020, to the extent that the Fund’s Total Annual Fund Operating Expenses exceed 0.95% of the Fund’s average daily net assets (excluding, as applicable, among other expenses, taxes, swap financing and related costs, acquired fund fees and expenses, dividends or interest on short positions, other interest expenses, brokerage commissions and extraordinary expenses). |
Any expense waiver or reimbursement is subject to recoupment by the Adviser within the following three years only if Total Annual Fund Operating Expenses fall below the lesser of this percentage limitation and any percentage limitation in place at the time. This agreement may be terminated or revised at any time with the consent of the Board of Trustees. |
1 Year | 3 Years |
$[ ] | $[ ] |
33 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 34 |
35 | Direxion Shares ETF Trust Prospectus |
• | Swap Agreements. Swap agreements are entered into primarily with major global financial institutions for a specified period which may range from one day to more than one year. In a standard swap transaction, two parties agree to exchange the return (or differentials in rates of return) earned or realized on particular predetermined reference assets or underlying securities or instruments. The gross return to be exchanged or swapped between the parties is calculated based on a notional amount or the return on or change in value of a particular dollar amount invested in a basket of securities representing a particular index or an ETF that seeks to track an index. |
If the Index has a dramatic move that causes a material decline in the Fund’s net assets, the terms of a swap agreement between the Fund and its counterparty may permit the counterparty to immediately close out the swap transaction with the Fund. In that event, the Fund may be unable to enter into another swap agreement or invest in other derivatives to achieve exposure consistent with the Fund’s investment objective. This may prevent the Fund from achieving its leveraged investment objective, even if the Index later reverses all or a portion of its movement. | |
• | Futures Contracts. Futures contracts are typically exchange-traded contracts that call for the future delivery of an asset at a certain price and date, or cash settlement of the terms of the contract. There may be an imperfect correlation between the changes in market value of the securities held by the Fund and the prices of futures |
contracts. There may not be a liquid secondary market for the futures contracts and the Fund may not be able to enter into a closing transaction. Exchanges may also limit the number of positions that can be held or controlled by the Fund or the Adviser, thus limiting the ability of the Fund to implement its leveraged investment strategy. Futures markets are highly volatile and the use of futures may increase the Fund’s volatility. The value of an investment in the Fund may change quickly and without warning. |
Direxion Shares ETF Trust Prospectus | 36 |
37 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 38 |
Portfolio Managers | Years of Service with the Fund | Primary Title |
Paul Brigandi | Since Inception | Portfolio Manager |
Tony Ng | Since Inception | Portfolio Manager |
39 | Direxion Shares ETF Trust Prospectus |
(1) | Estimated for the Fund's current fiscal year. |
(2) | Rafferty Asset Management, LLC (“Rafferty” or the “Adviser”) has entered into an Operating Expense Limitation Agreement with the Fund. Under the Operating Expense Limitation Agreement, Rafferty has contractually agreed to waive all or a portion of its management fee and/or reimburse the Fund for Other Expenses through September 1, 2020, to the extent that the Fund’s Total Annual Fund Operating Expenses exceed 0.95% of the Fund’s average daily net assets (excluding, as applicable, among other expenses, taxes, swap financing and related costs, acquired fund fees and expenses, dividends or interest on short positions, other interest expenses, brokerage commissions and extraordinary expenses). |
Any expense waiver or reimbursement is subject to recoupment by the Adviser within the following three years only if Total Annual Fund Operating Expenses fall below the lesser of this percentage limitation and any percentage limitation in place at the time. This agreement may be terminated or revised at any time with the consent of the Board of Trustees. |
1 Year | 3 Years |
$[ ] | $[ ] |
Direxion Shares ETF Trust Prospectus | 40 |
41 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 42 |
• | Swap Agreements. Swap agreements are entered into primarily with major global financial institutions for a specified period which may range from one day to more than one year. In a standard swap transaction, two parties agree to exchange the return (or differentials in rates of return) earned or realized on particular predetermined reference assets or underlying securities or instruments. The gross return to be exchanged or swapped between the parties is calculated based on a notional amount or the return on or change in value of a particular dollar amount invested in a basket of securities representing a particular index or an ETF that seeks to track an index. |
If the Index has a dramatic move that causes a material decline in the Fund’s net assets, the terms of a swap agreement between the Fund and its counterparty may permit the counterparty to immediately close out the swap transaction with the Fund. In that event, the Fund may be unable to enter into another swap agreement or invest in other derivatives to achieve exposure consistent with the Fund’s investment objective. This may prevent the Fund from achieving its inverse leveraged investment objective, even if the Index later reverses all or a portion of its movement. |
• | Futures Contracts. Futures contracts are typically exchange-traded contracts that call for the future delivery of an asset at a certain price and date, or cash settlement of the terms of the contract. There may be an imperfect correlation between the changes in market value of the securities held by the Fund and the prices of futures contracts. There may not be a liquid secondary market for the futures contracts and the Fund may not be able to enter into a closing transaction. Exchanges may also limit the number of positions that can be held or controlled by the Fund or the Adviser, thus limiting the ability of the Fund to implement its inverse leveraged investment strategy. Futures markets are highly volatile and the use of futures may increase the Fund’s volatility. The value of an investment in the Fund may change quickly and without warning. |
43 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 44 |
45 | Direxion Shares ETF Trust Prospectus |
Portfolio Managers | Years of Service with the Fund | Primary Title |
Paul Brigandi | Since Inception | Portfolio Manager |
Tony Ng | Since Inception | Portfolio Manager |
Direxion Shares ETF Trust Prospectus | 46 |
(1) | Estimated for the Fund's current fiscal year. |
(2) | Rafferty Asset Management, LLC (“Rafferty” or the “Adviser”) has entered into an Operating Expense Limitation Agreement with the Fund. Under the Operating Expense Limitation Agreement, Rafferty has contractually agreed to waive all or a portion of its management fee and/or reimburse the Fund for Other Expenses through September 1, 2020, to the extent that the Fund’s Total Annual Fund Operating Expenses exceed 0.95% of the Fund’s average daily net assets (excluding, as applicable, among other expenses, taxes, swap financing and related costs, acquired fund fees and expenses, dividends or interest on short positions, other interest expenses, brokerage commissions and extraordinary expenses). |
Any expense waiver or reimbursement is subject to recoupment by the Adviser within the following three years only if Total Annual Fund Operating Expenses fall below the lesser of this percentage limitation and any percentage limitation in place at the time. This agreement may be terminated or revised at any time with the consent of the Board of Trustees. |
1 Year | 3 Years |
$[ ] | $[ ] |
47 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 48 |
49 | Direxion Shares ETF Trust Prospectus |
• | Swap Agreements. Swap agreements are entered into primarily with major global financial institutions for a specified period which may range from one day to more than one year. In a standard swap transaction, two parties agree to exchange the return (or differentials in rates of return) earned or realized on particular predetermined reference assets or underlying securities or instruments. The gross return to be exchanged or swapped between the parties is calculated based on a notional amount or the return on or change in value of a particular dollar amount invested in a basket of securities representing a particular index or an ETF that seeks to track an index. |
If the Index has a dramatic move that causes a material decline in the Fund’s net assets, the terms of a swap agreement between the Fund and its counterparty may permit the counterparty to immediately close out the swap transaction with the Fund. In that event, the Fund may be unable to enter into another swap agreement or invest |
• | Futures Contracts. Futures contracts are typically exchange-traded contracts that call for the future delivery of an asset at a certain price and date, or cash settlement of the terms of the contract. There may be an imperfect correlation between the changes in market value of the securities held by the Fund and the prices of futures contracts. There may not be a liquid secondary market for the futures contracts and the Fund may not be able to enter into a closing transaction. Exchanges may also limit the number of positions that can be held or controlled by the Fund or the Adviser, thus limiting the ability of the Fund to implement its inverse leveraged investment strategy. Futures markets are highly volatile and the use of futures may increase the Fund’s volatility. The value of an investment in the Fund may change quickly and without warning. |
Direxion Shares ETF Trust Prospectus | 50 |
51 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 52 |
53 | Direxion Shares ETF Trust Prospectus |
Portfolio Managers | Years of Service with the Fund | Primary Title |
Paul Brigandi | Since Inception | Portfolio Manager |
Tony Ng | Since Inception | Portfolio Manager |
Direxion Shares ETF Trust Prospectus | 54 |
(1) | Estimated for the Fund's current fiscal year. |
(2) | Rafferty Asset Management, LLC (“Rafferty” or the “Adviser”) has entered into an Operating Expense Limitation Agreement with the Fund. Under the Operating Expense Limitation Agreement, Rafferty has contractually agreed to waive all or a portion of its management fee and/or reimburse the Fund for Other Expenses through September 1, 2020, to the extent that the Fund’s Total Annual Fund Operating Expenses exceed 0.95% of the Fund’s average daily net assets (excluding, as applicable, among other expenses, taxes, swap financing and related costs, acquired fund fees and expenses, dividends or interest on short positions, other interest expenses, brokerage commissions and extraordinary expenses). |
Any expense waiver or reimbursement is subject to recoupment by the Adviser within the following three years only if Total Annual Fund Operating Expenses fall below the lesser of this percentage limitation and any percentage limitation in place at the time. This agreement may be terminated or revised at any time with the consent of the Board of Trustees. |
1 Year | 3 Years |
$[ ] | $[ ] |
55 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 56 |
57 | Direxion Shares ETF Trust Prospectus |
• | Swap Agreements. Swap agreements are entered into primarily with major global financial institutions for a specified period which may range from one day to more than one year. In a standard swap transaction, two parties agree to exchange the return (or differentials in rates of return) earned or realized on particular predetermined reference assets or underlying securities or instruments. The gross return to be exchanged or swapped between the parties is calculated based on a notional amount or the return on or change in value of a particular dollar amount invested in a basket of securities representing a particular index or an ETF that seeks to track an index. |
If the Index has a dramatic move that causes a material decline in the Fund’s net assets, the terms of a swap agreement between the Fund and its counterparty may permit the counterparty to immediately close out the swap transaction with the Fund. In that event, the Fund may be unable to enter into another swap agreement or invest in other derivatives to achieve exposure consistent with the Fund’s investment objective. This may prevent the Fund from achieving its leveraged investment objective, |
• | Futures Contracts. Futures contracts are typically exchange-traded contracts that call for the future delivery of an asset at a certain price and date, or cash settlement of the terms of the contract. There may be an imperfect correlation between the changes in market value of the securities held by the Fund and the prices of futures contracts. There may not be a liquid secondary market for the futures contracts and the Fund may not be able to enter into a closing transaction. Exchanges may also limit the number of positions that can be held or controlled by the Fund or the Adviser, thus limiting the ability of the Fund to implement its leveraged investment strategy. Futures markets are highly volatile and the use of futures may increase the Fund’s volatility. The value of an investment in the Fund may change quickly and without warning. |
Direxion Shares ETF Trust Prospectus | 58 |
59 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 60 |
Portfolio Managers | Years of Service with the Fund | Primary Title |
Paul Brigandi | Since Inception | Portfolio Manager |
Tony Ng | Since Inception | Portfolio Manager |
61 | Direxion Shares ETF Trust Prospectus |
(1) | Estimated for the Fund's current fiscal year. |
(2) | Rafferty Asset Management, LLC (“Rafferty” or the “Adviser”) has entered into an Operating Expense Limitation Agreement with the Fund. Under the Operating Expense Limitation Agreement, Rafferty has contractually agreed to waive all or a portion of its management fee and/or reimburse the Fund for Other Expenses through September 1, 2020, to the extent that the Fund’s Total Annual Fund Operating Expenses exceed 0.95% of the Fund’s average daily net assets (excluding, as applicable, among other expenses, taxes, swap financing and related costs, acquired fund fees and expenses, dividends or interest on short positions, other interest expenses, brokerage commissions and extraordinary expenses). |
Any expense waiver or reimbursement is subject to recoupment by the Adviser within the following three years only if Total Annual Fund Operating Expenses fall below the lesser of this percentage limitation and any percentage limitation in place at the time. This agreement may be terminated or revised at any time with the consent of the Board of Trustees. |
1 Year | 3 Years |
$[ ] | $[ ] |
Direxion Shares ETF Trust Prospectus | 62 |
63 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 64 |
• | Swap Agreements. Swap agreements are entered into primarily with major global financial institutions for a specified period which may range from one day to more than one year. In a standard swap transaction, two parties agree to exchange the return (or differentials in rates of return) earned or realized on particular predetermined reference assets or underlying securities or instruments. The gross return to be exchanged or swapped between the parties is calculated based on a notional amount or the return on or change in value of a particular dollar amount invested in a basket of securities representing a particular index or an ETF that seeks to track an index. |
If the Index has a dramatic move that causes a material decline in the Fund’s net assets, the terms of a swap agreement between the Fund and its counterparty may permit the counterparty to immediately close out the swap |
• | Futures Contracts. Futures contracts are typically exchange-traded contracts that call for the future delivery of an asset at a certain price and date, or cash settlement of the terms of the contract. There may be an imperfect correlation between the changes in market value of the securities held by the Fund and the prices of futures contracts. There may not be a liquid secondary market for the futures contracts and the Fund may not be able to enter into a closing transaction. Exchanges may also limit the number of positions that can be held or controlled by the Fund or the Adviser, thus limiting the ability of the Fund to implement its inverse leveraged investment strategy. Futures markets are highly volatile and the use of futures may increase the Fund’s volatility. The value of an investment in the Fund may change quickly and without warning. |
65 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 66 |
67 | Direxion Shares ETF Trust Prospectus |
Portfolio Managers | Years of Service with the Fund | Primary Title |
Paul Brigandi | Since Inception | Portfolio Manager |
Tony Ng | Since Inception | Portfolio Manager |
Direxion Shares ETF Trust Prospectus | 68 |
(1) | Estimated for the Fund's current fiscal year. |
(2) | Rafferty Asset Management, LLC (“Rafferty” or the “Adviser”) has entered into an Operating Expense Limitation Agreement with the Fund. Under the Operating Expense Limitation Agreement, Rafferty has contractually agreed to waive all or a portion of its management fee and/or reimburse the Fund for Other Expenses through September 1, 2020, to the extent that the Fund’s Total Annual Fund Operating Expenses exceed 0.95% of the Fund’s average daily net assets (excluding, as applicable, among other expenses, taxes, swap financing and related costs, acquired fund fees and expenses, dividends or interest on short positions, other interest expenses, brokerage commissions and extraordinary expenses). |
Any expense waiver or reimbursement is subject to recoupment by the Adviser within the following three years only if Total Annual Fund Operating Expenses fall below the lesser of this percentage limitation and any percentage limitation in place at the time. This agreement may be terminated or revised at any time with the consent of the Board of Trustees. |
1 Year | 3 Years |
$[ ] | $[ ] |
69 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 70 |
71 | Direxion Shares ETF Trust Prospectus |
• | Swap Agreements. Swap agreements are entered into primarily with major global financial institutions for a specified period which may range from one day to more than one year. In a standard swap transaction, two parties agree to exchange the return (or differentials in rates of return) earned or realized on particular predetermined reference assets or underlying securities or instruments. The gross return to be exchanged or swapped between the parties is calculated based on a notional amount or the return on or change in value of a particular dollar amount invested in a basket of securities representing a particular index or an ETF that seeks to track an index. |
If the Index has a dramatic move that causes a material decline in the Fund’s net assets, the terms of a swap agreement between the Fund and its counterparty may permit the counterparty to immediately close out the swap transaction with the Fund. In that event, the Fund may be unable to enter into another swap agreement or invest in other derivatives to achieve exposure consistent with the Fund’s investment objective. This may prevent the Fund from achieving its inverse leveraged investment |
• | Futures Contracts. Futures contracts are typically exchange-traded contracts that call for the future delivery of an asset at a certain price and date, or cash settlement of the terms of the contract. There may be an imperfect correlation between the changes in market value of the securities held by the Fund and the prices of futures contracts. There may not be a liquid secondary market for the futures contracts and the Fund may not be able to enter into a closing transaction. Exchanges may also limit the number of positions that can be held or controlled by the Fund or the Adviser, thus limiting the ability of the Fund to implement its inverse leveraged investment strategy. Futures markets are highly volatile and the use of futures may increase the Fund’s volatility. The value of an investment in the Fund may change quickly and without warning. |
Direxion Shares ETF Trust Prospectus | 72 |
73 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 74 |
Portfolio Managers | Years of Service with the Fund | Primary Title |
Paul Brigandi | Since Inception | Portfolio Manager |
Tony Ng | Since Inception | Portfolio Manager |
75 | Direxion Shares ETF Trust Prospectus |
Fund | Underlying Index |
Daily
Leveraged Investment Objective |
Direxion Daily MSCI Brazil Bear 3X Shares | MSCI Brazil 25/50 Index | -300% |
Direxion Daily MSCI India Bear 3X Shares | MSCI India Index | -300% |
Direxion Daily MSCI South Korea Bear 3X Shares | MSCI Korea 25/50 Index | -300% |
Direxion Daily MSCI Turkey Bull 3X Shares | MSCI Turkey IMI 25/50 Index | 300% |
Direxion Daily S&P 500 ® High Beta Bull 3X Shares | S&P 500 ® High Beta Index | 300% |
Direxion Daily S&P 500 ® High Beta Bear 3X Shares | -300% | |
Direxion Daily Homebuilders & Supplies Bear 3X Shares | Dow Jones U.S. Select Home Construction Index | -300% |
Direxion Daily Dow Jones Internet Bull 3X Shares | Dow Jones Internet Composite Index | 300% |
Direxion Daily Dow Jones Internet Bear 3X Shares | -300% | |
Direxion Daily Retail Bear 3X Shares | S&P Retail Select Industry Index | -300% |
Direxion Shares ETF Trust Prospectus | 76 |
77 | Direxion Shares ETF Trust Prospectus |
Day |
Index
Value |
Index
Performance |
Value
of
Investment |
$100.00 | $100.00 | ||
1 | $105.00 | 5.00% | $105.00 |
2 | $100.00 | -4.76% | $100.00 |
Direxion Shares ETF Trust Prospectus | 78 |
Day |
Index
Performance |
300%
of
Index Performance |
Value
of
Investment |
$100.00 | |||
1 | 5.00% | 15.0% | $115.00 |
2 | -4.76% | -14.28% | $98.57 |
79 | Direxion Shares ETF Trust Prospectus |
Volatility
Range |
Bull
Fund
Loss |
Bear
Fund
Loss |
10% | -3% | -6% |
20% | -11% | -21% |
30% | -24% | -42% |
40% | -38% | -62% |
50% | -53% | -78% |
60% | -67% | -89% |
70% | -78% | -95% |
80% | -87% | -98% |
90% | -92% | -99% |
100% | -96% | -99% |
Direxion Shares ETF Trust Prospectus | 80 |
Index |
5-Year
Historical
Volatility Rate |
Dow Jones Internet Composite Index | 19.95% |
Dow Jones U.S. Select Home Construction Index | 20.47% |
MSCI Brazil 25/50 Index | 31.62% |
MSCI India Index | 15.81% |
MSCI Korea 25/50 Index | 17.45% |
MSCI Turkey IMI 25/50 Index | 30.96% |
S&P 500 ® High Beta Index | 20.12% |
S&P Retail Select Industry Index | 18.06% |
81 | Direxion Shares ETF Trust Prospectus |
Index Move |
Resulting
Exposure
for Bull Fund |
-5% | 335% |
-4% | 327% |
-3% | 320% |
-2% | 313% |
-1% | 306% |
0% | 300% |
1% | 294% |
2% | 289% |
3% | 283% |
4% | 279% |
5% | 274% |
Index Move |
Resulting
Exposure
for Bear Fund |
-5% | -248% |
-4% | -257% |
-3% | -267% |
-2% | -277% |
-1% | -288% |
0% | -300% |
1% | -312% |
2% | -326% |
3% | -340% |
4% | -355% |
5% | -371% |
Direxion Shares ETF Trust Prospectus | 82 |
Index | Bull Fund | Bear Fund | |||||||
Value |
Daily
Performance |
Cumulative
Performance |
NAV |
Daily
Performance |
Cumulative
Performance |
NAV |
Daily
Performance |
Cumulative
Performance |
|
100 | $100.00 | $100.00 | |||||||
Day 1 | 105 | 5.00% | 5.00% | $115.00 | 15.00% | 15.00% | $ 85.00 | -15.00% | -15.00% |
Day 2 | 110 | 4.76% | 10.00% | $131.43 | 14.29% | 31.43% | $ 72.86 | -14.29% | -27.14% |
Day 3 | 100 | -9.09% | 0.00% | $ 95.58 | -27.27% | -4.42% | $ 92.73 | 27.27% | -7.27% |
Day 4 | 90 | -10.00% | -10.00% | $ 66.91 | -30.00% | -33.09% | $120.55 | 30.00% | 20.55% |
Day 5 | 85 | -5.56% | -15.00% | $ 55.76 | -16.67% | -44.24% | $140.64 | 16.67% | 40.64% |
Day 6 | 100 | 17.65% | 0.00% | $ 85.28 | 52.94% | -14.72% | $ 66.18 | -52.94% | -33.82% |
Day 7 | 95 | -5.00% | -5.00% | $ 72.48 | -15.00% | -27.52% | $ 76.11 | 15.00% | -23.89% |
Day 8 | 100 | 5.26% | 0.00% | $ 83.93 | 15.79% | -16.07% | $ 64.09 | -15.79% | -35.91% |
Day 9 | 105 | 5.00% | 5.00% | $ 96.52 | 15.00% | -3.48% | $ 54.48 | -15.00% | -45.52% |
Day 10 | 100 | -4.76% | 0.00% | $ 82.73 | -14.29% | -17.27% | $ 62.26 | 14.29% | -37.74% |
Index | Bull Fund | Bear Fund | |||||||
Value |
Daily
Performance |
Cumulative
Performance |
NAV |
Daily
Performance |
Cumulative
Performance |
NAV |
Daily
Performance |
Cumulative
Performance |
|
100 | $100.00 | $100.00 | |||||||
Day 1 | 102 | 2.00% | 2.00% | $106.00 | 6.00% | 6.00% | $ 94.00 | -6.00% | -6.00% |
Day 2 | 104 | 1.96% | 4.00% | $112.24 | 5.88% | 12.24% | $ 88.47 | -5.88% | -11.53% |
Day 3 | 106 | 1.92% | 6.00% | $118.71 | 5.77% | 18.71% | $ 83.37 | -5.77% | -16.63% |
Day 4 | 108 | 1.89% | 8.00% | $125.43 | 5.66% | 25.43% | $ 78.65 | -5.66% | -21.35% |
Day 5 | 110 | 1.85% | 10.00% | $132.40 | 5.56% | 32.40% | $ 74.28 | -5.56% | -25.72% |
Day 6 | 112 | 1.82% | 12.00% | $139.62 | 5.45% | 39.62% | $ 70.23 | -5.45% | -29.77% |
Day 7 | 114 | 1.79% | 14.00% | $147.10 | 5.36% | 47.10% | $ 66.46 | -5.36% | -33.54% |
Day 8 | 116 | 1.75% | 16.00% | $154.84 | 5.26% | 54.84% | $ 62.97 | -5.26% | -37.03% |
Day 9 | 118 | 1.72% | 18.00% | $162.85 | 5.17% | 62.85% | $ 59.71 | -5.17% | -40.29% |
Day 10 | 120 | 1.69% | 20.00% | $171.13 | 5.08% | 71.13% | $ 56.67 | -5.08% | -43.33% |
83 | Direxion Shares ETF Trust Prospectus |
Index | Bull Fund | Bear Fund | |||||||
Value |
Daily
Performance |
Cumulative
Performance |
NAV |
Daily
Performance |
Cumulative
Performance |
NAV |
Daily
Performance |
Cumulative
Performance |
|
100 | $100.00 | $100.00 | |||||||
Day 1 | 98 | -2.00% | -2.00% | $ 94.00 | -6.00% | -6.00% | $106.00 | 6.00% | 6.00% |
Day 2 | 96 | -2.04% | -4.00% | $ 88.24 | -6.12% | -11.76% | $112.49 | 6.12% | 12.49% |
Day 3 | 94 | -2.08% | -6.00% | $ 82.73 | -6.25% | -11.76% | $119.52 | 6.25% | 19.52% |
Day 4 | 92 | -2.13% | -8.00% | $ 77.45 | -6.38% | -22.55% | $127.15 | 6.38% | 27.15% |
Day 5 | 90 | -2.17% | -10.00% | $ 72.40 | -6.52% | -27.60% | $135.44 | 6.52% | 35.44% |
Day 6 | 88 | -2.22% | -12.00% | $ 67.57 | -6.67% | -32.43% | $144.47 | 6.67% | 44.47% |
Day 7 | 86 | -2.27% | -14.00% | $ 62.96 | -6.82% | -37.04% | $154.32 | 6.82% | 54.32% |
Day 8 | 84 | -2.33% | -16.00% | $ 58.57 | -6.98% | -41.43% | $165.09 | 6.98% | 65.09% |
Day 9 | 82 | -2.38% | -18.00% | $ 54.39 | -7.14% | -45.61% | $176.88 | 7.14% | 76.88% |
Day 10 | 80 | -2.44% | -20.00% | $ 50.41 | -7.32% | -49.59% | $189.82 | 7.32% | 89.82% |
Direxion Shares ETF Trust Prospectus | 84 |
Direxion Daily MSCI Brazil Bear 3X Shares | Direxion Daily MSCI India Bear 3X Shares | Direxion Daily MSCI South Korea Bear 3X Shares | Direxion Daily MSCI Turkey Bull 3X Shares | Direxion Daily S&P 500 ® High Beta Bull 3X Shares | Direxion Daily S&P 500 ® High Beta Bear 3X Shares | Direxion Daily Homebuilders & Supplies Bear 3X Shares | Direxion Daily Dow Jones Internet Bull 3X Shares | Direxion Daily Dow Jones Internet Bear 3X Shares | Direxion Daily Retail Bear 3X Shares | |
Effects of Compounding and Market Volatility Risk | X | X | X | X | X | X | X | X | X | X |
Leverage Risk | X | X | X | X | X | X | X | X | X | X |
Market Risk | X | X | X | X | X | X | X | X | X | X |
Aggressive Investment Techniques Risk | X | X | X | X | X | X | X | X | X | X |
Liquidity Risk | X | X | X | X | X | X | X | X | X | X |
Derivatives Risk | X | X | X | X | X | X | X | X | X | X |
Counterparty Risk | X | X | X | X | X | X | X | X | X | X |
Shorting Risk | X | X | X | X | X | X | X | |||
Cash Transaction Risk | X | X | X | X | X | X | X | |||
Intra-Day Investment Risk | X | X | X | X | X | X | X | X | X | X |
Daily Index Correlation/Tracking Risk | X | X | X | |||||||
Daily Inverse Index Correlation/Tracking Risk | X | X | X | X | X | X | X | |||
Other Investment Companies (including ETFs) Risk | X | X | X | |||||||
Brazilian Securities Risk | X | |||||||||
Consumer Discretionary Sector Risk | X | |||||||||
Consumer Goods Sector Risk | X | |||||||||
Consumer Services Industry Risk | X | |||||||||
Emerging Markets Risk | X | X | X | X | ||||||
Financials Sector Risk | X | X | X | |||||||
High Beta Risk | X | X | ||||||||
Homebuilding Industry Risk | X | |||||||||
Indian Securities Risk | X | |||||||||
Industrials Sector Risk | X | X | ||||||||
Information Technology Sector Risk | X | X | X | X | X | X | ||||
Internet Companies Risk | X | X | ||||||||
Materials Sector Risk | X | |||||||||
Retail Industry Risk | X | X | ||||||||
South Korean Securities Risk | X | |||||||||
Turkish Securities Risk | X | |||||||||
Large-Capitalization Company Risk | X | X | X | X | X | X | X | X | X | |
Micro-Capitalization Company Risk | X | X | X | |||||||
Mid-Capitalization Company Risk | X | X | ||||||||
Small- and/or Mid-Capitalization Company Risk | X | X | X | X | X | X | X | X | ||
Currency Exchange Rate Risk | X | X | X | X | ||||||
Depositary Receipt Risk | X | |||||||||
Foreign Securities Risk | X | X | X | X |
85 | Direxion Shares ETF Trust Prospectus |
Direxion Daily MSCI Brazil Bear 3X Shares | Direxion Daily MSCI India Bear 3X Shares | Direxion Daily MSCI South Korea Bear 3X Shares | Direxion Daily MSCI Turkey Bull 3X Shares | Direxion Daily S&P 500 ® High Beta Bull 3X Shares | Direxion Daily S&P 500 ® High Beta Bear 3X Shares | Direxion Daily Homebuilders & Supplies Bear 3X Shares | Direxion Daily Dow Jones Internet Bull 3X Shares | Direxion Daily Dow Jones Internet Bear 3X Shares | Direxion Daily Retail Bear 3X Shares | |
Geographic Concentration Risk | X | X | X | X | ||||||
International Closed-Market Trading Risk | X | X | X | X | ||||||
Cybersecurity Risk | X | X | X | X | X | X | X | X | X | X |
Early Close/Trading Halt Risk | X | X | X | X | X | X | X | X | X | X |
Equity Securities Risk | X | X | X | X | X | X | X | X | X | X |
High Portfolio Turnover Risk | X | X | X | X | X | X | X | X | X | X |
Investment Risk | X | X | X | X | X | X | X | X | X | X |
Money Market Instrument Risk | X | X | X | X | X | X | X | X | X | X |
Non-Diversification Risk | X | X | X | X | X | X | X | X | X | X |
Securities Lending Risk | X | X | X | X | X | X | X | X | X | X |
Special Risks of Exchange-Traded Funds | X | X | X | X | X | X | X | X | X | X |
Direxion Shares ETF Trust Prospectus | 86 |
87 | Direxion Shares ETF Trust Prospectus |
• | Swap Agreements . Swap agreements are entered into primarily with major global financial institutions for a specified period which may range from one day to more than one year. In a standard swap transaction, two parties agree to exchange the return (or differentials in rates of return) earned or realized on particular predetermined reference or underlying securities or instruments. The gross return to be exchanged or swapped between the parties is calculated based on a notional amount or the return |
on or change in value of a particular dollar amount invested in a reference asset. | |
• | Futures Contracts . A futures contact is a contract to purchase or sell a particular security, or the cash value of an index, at a specified future date at a price agreed upon when the contract is made. Under such contracts, no delivery of the actual securities is required. Rather, upon the expiration of the contract, settlement is made by exchanging cash in an amount equal to the difference between the contract price and the closing price of a security or index at expiration, net of the variation margin that was previously paid. |
• | Forward Contracts . Forward contracts are two-party contracts pursuant to which one party agrees to pay the counterparty a fixed price for an agreed upon amount of commodities, securities, or the cash value of the commodities, securities or the securities index, at an agreed upon date. A forward currency contract is an obligation to buy or sell a specific currency at a future date, which may be any fixed number of days from the date of the contract agreed upon by the parties, at a price set at the time of the contract. |
• | Options . An option is a contract that gives the purchaser (holder) of the option, in return for a premium, the right to buy from (call) or sell to (put) the seller (writer) of the option the security or currency underlying the option at a specified exercise price at any time during the term of the option (normally not exceeding nine months). The writer of an option has the obligation upon exercise of the option to deliver the underlying security or currency upon payment of the exercise price or to pay the exercise price upon delivery of the underlying security or currency. |
• | Options on Futures Contracts . An option on a futures contract provides the holder with the right to enter into a “long” position in the underlying futures contract, in the case of a call option, or a “short” position in the underlying futures contract in the case of a put option, at a fixed exercise price to a stated expiration date. Upon exercise of the option by the holder, the contract market clearing house establishes a corresponding short position for the writer of the option, in the case of a call option, or a corresponding long position, in the case of a put option. |
Direxion Shares ETF Trust Prospectus | 88 |
89 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 90 |
91 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 92 |
93 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 94 |
95 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 96 |
97 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 98 |
99 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust | Fixed Transaction Fee |
Maximum
Additional Charge for Redemptions* |
||
In-Kind | Cash | |||
NSCC | Outside NSCC |
Outside
NSCC |
||
Direxion Daily MSCI Brazil Bear 3X Shares | N/A | N/A | $250 | Up to 2.00% |
Direxion Daily MSCI India Bear 3X Shares | N/A | N/A | $250 | Up to 2.00% |
Direxion Daily MSCI South Korea Bear 3X Shares | N/A | N/A | $250 | Up to 2.00% |
Direxion Daily MSCI Turkey Bull 3X Shares | $250 | Up to 300% of NSCC Amount | $250 | Up to 2.00% |
Direxion Daily S&P 500 ® High Beta Bull 3X Shares | $250 | Up to 300% of NSCC Amount | $250 | Up to 2.00% |
Direxion Daily S&P 500 ® High Beta Bear 3X Shares | N/A | N/A | $250 | Up to 2.00% |
Direxion Daily Homebuilders & Supplies Bear 3X Shares | N/A | N/A | $250 | Up to 2.00% |
Direxion Daily Dow Jones Internet Bull 3X Shares | $250 | Up to 300% of NSCC Amount | $250 | Up to 2.00% |
Direxion Daily Dow Jones Internet Bear 3X Shares | N/A | N/A | $250 | Up to 2.00% |
Direxion Daily Retail Bear 3X Shares | N/A | N/A | $250 | Up to 2.00% |
* | As a percentage of the amount invested. |
Direxion Shares ETF Trust Prospectus | 100 |
Fund | Symbol |
Direxion Daily MSCI Brazil Bear 3X Shares | |
Direxion Daily MSCI India Bear 3X Shares | |
Direxion Daily MSCI South Korea Bear 3X Shares | |
Direxion Daily MSCI Turkey Bull 3X Shares | |
Direxion Daily S&P 500 ® High Beta Bull 3X Shares | |
Direxion Daily S&P 500 ® High Beta Bear 3X Shares | |
Direxion Daily Homebuilders & Supplies Bear 3X Shares | |
Direxion Daily Dow Jones Internet Bull 3X Shares | |
Direxion Daily Dow Jones Internet Bear 3X Shares | |
Direxion Daily Retail Bear 3X Shares |
101 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 102 |
103 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 104 |
105 | Direxion Shares ETF Trust Prospectus |
Direxion Shares ETF Trust Prospectus | 106 |
1301 Avenue of the Americas (6th Avenue), 28th Floor | New York, New York 10019 | 866-476-7523 |
Write to: | Direxion Shares ETF Trust |
1301 Avenue
of the Americas (6th Avenue), 28th Floor
New York, New York 10019 |
|
Call: | 866-476-7523 |
By Internet: | www.direxioninvestments.com |
1301 Avenue of the Americas (6th Avenue), 28th Floor | New York, New York 10019 | 866-476-7523 |
3X Bull Funds | 3X Bear Funds |
Direxion Daily MSCI Brazil Bear 3X Shares ( ) | |
Direxion Daily MSCI India Bear 3X Shares ( ) | |
Direxion Daily MSCI South Korea Bear 3X Shares ( ) | |
Direxion Daily MSCI Turkey Bull 3X Shares ( ) | |
Direxion Daily S&P 500 ® High Beta Bull 3X Shares ( ) | Direxion Daily S&P 500 ® High Beta Bear 3X Shares ( ) |
Direxion Daily Homebuilders & Supplies Bear 3X Shares ( ) | |
Direxion Daily Dow Jones Internet Bull 3X Shares ( ) | Direxion Daily Dow Jones Internet Bear 3X Shares ( ) |
Direxion Daily Retail Bear 3X Shares ( ) | |
(1) | The Funds pursue daily leveraged investment objectives, which means that the Funds are riskier than alternatives that do not use leverage because the Funds magnify the performance of their underlying index. |
(2) | Each Bear Fund pursues a daily leveraged investment objective that is inverse to the performance of its underlying index, a result opposite of most mutual funds and exchange-traded funds. |
(3) | The pursuit of daily investment objectives means that the return of a Fund for a period longer than a full trading day will be the product of a series of daily leveraged returns for each trading day during the relevant period. As a consequence, especially in periods of market volatility, the volatility of the underlying index may affect a Fund’s return as much as, or more than, the return of the underlying index. Further, the return for investors that invest for periods less than a full trading day will not be the product of the return of a Fund’s stated daily leveraged investment objective and the performance of the underlying index for the full trading day. During periods of high volatility, the Funds may not perform as expected and the Funds may have losses when an investor may have expected gains if the Funds are held for a period that is different than one trading day. |
(a) | understand the risks associated with the use of leverage; |
(b) | understand the consequences of seeking daily leveraged investment results; |
(c) | for a Bear Fund, understand the risk of shorting; and |
(d) | intend to actively monitor and manage their investments. |
Page | |
|
3 |
|
4 |
|
4 |
|
4 |
|
5 |
|
5 |
|
6 |
|
6 |
|
7 |
|
13 |
|
14 |
|
16 |
|
17 |
|
17 |
|
18 |
|
18 |
|
19 |
|
19 |
|
20 |
|
20 |
|
26 |
|
26 |
|
31 |
|
32 |
|
32 |
|
32 |
|
32 |
|
33 |
|
33 |
|
33 |
|
34 |
|
35 |
|
35 |
|
35 |
|
36 |
|
36 |
|
37 |
|
38 |
|
39 |
|
39 |
|
40 |
|
40 |
|
40 |
|
41 |
Page | |
|
41 |
|
44 |
|
44 |
|
46 |
|
46 |
|
47 |
|
48 |
|
48 |
|
49 |
|
49 |
|
50 |
|
50 |
|
50 |
|
50 |
|
51 |
|
51 |
|
52 |
|
53 |
|
53 |
|
54 |
|
54 |
|
54 |
|
55 |
|
55 |
|
56 |
|
56 |
|
59 |
|
59 |
|
60 |
|
60 |
|
60 |
|
60 |
|
64 |
|
A-1 |
(1) | Each Fund pursues a daily leveraged investment objective, which means that the Funds are riskier than alternatives that do not use leverage because each Fund magnifies the performance of its underlying index. |
(2) | Each Bear Fund pursues a daily leveraged investment objective that is inverse to the performance of its underlying index, a result opposite of most mutual funds and ETFs. |
(3) | The pursuit of daily leveraged investment objectives means that the return of a Fund for a period different than a trading day will be the product of the series of daily leveraged returns for each trading day during the relevant period. As a consequence, especially in periods of market volatility, the volatility of the underlying index may affect a Fund’s return as much or more than the return of the underlying index. Further, the return for investors that invest for a period different than a full trading day will not be the product of the return of a Fund’s stated daily leveraged investment objective and the performance of the underlying index for the full trading day. During periods of high volatility, the Funds may not perform as expected and the Funds may have losses when an investor may have expected gains if the Funds are held for a period that is different than one trading day. |
(a) | understand the risks associated with the use of leverage; |
(b) | understand the consequences of seeking daily leveraged investment results; |
(c) | for the Bear Funds, understand the risk of shorting; and |
(d) | intend to actively monitor and manage their investments. |
Fund | Underlying Index |
Daily
Leveraged Investment Objective |
Direxion Daily MSCI Turkey Bull 3X Shares | MSCI Turkey IMI 25/50 Index | 300% |
Direxion Daily S&P 500 ® High Beta Bull 3X Shares | S&P 500 ® High Beta Index | 300% |
Direxion Daily S&P 500 ® High Beta Bear 3X Shares | -300% | |
Direxion Daily Homebuilders & Supplies Bear 3X Shares | Dow Jones U.S. Select Home Construction Index | -300% |
Direxion Daily Dow Jones Internet Bull 3X Shares | Dow Jones Internet Composite Index | 300% |
Direxion Daily Dow Jones Internet Bear 3X Shares | -300% | |
Direxion Daily Retail Bear 3X Shares | S&P Retail Select Industry Index | -300% |
1. | Borrow money, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. |
2. | Issue senior securities, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. |
3. | Make loans, except to the extent permitted by the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief. |
4. | Except for any Fund that is “concentrated” in an industry or group of industries within the meaning of the 1940 Act, purchase the securities of any issuer (other than securities issued or guaranteed by the U.S. government or any of its agencies or instrumentalities) if, as a result, 25% or more of a Fund’s total assets would be invested in the securities of companies whose principal business activities are in the same industry. However, each Fund that tracks an underlying index will only concentrate its investment in a particular industry or group of industries to approximately the same extent as its underlying index is so concentrated. |
5. | Purchase or sell real estate, except that, to the extent permitted by applicable law, each Fund may (a) invest in securities or other instruments directly secured by real estate, and (b) invest in securities or other instruments issued by issuers that invest in real estate. |
6. | Purchase or sell commodities or commodity contracts unless acquired as a result of ownership of securities or other instruments issued by persons that purchase or sell commodities or commodities contracts; but this shall not prevent a Fund from purchasing, selling and entering into financial futures contracts (including futures contracts on indices of securities, interest rates and currencies), and options on financial futures contracts (including futures contracts on indices of securities, interest rates and currencies), warrants, swaps, forward contracts, foreign currency spot and forward contracts and other financial instruments. |
7. | Underwrite securities issued by others, except to the extent that a Fund may be considered an underwriter within the meaning of the 1933 Act in the disposition of restricted securities or other investment company securities. |
Name,
Address
and Age |
Position(s)
Held with Fund |
Term
of
Office and Length of Time Served |
Principal
Occupation(s) During
Past Five Years |
#
of
Portfolios in Direxion Family of Investment Companies Overseen by Trustee (2) |
Other
Trusteeships/ Directorships Held by Trustee During Past Five Years |
Daniel
D. O’Neill
(1)
Age: 50 |
Chairman of the Board of Trustees |
Lifetime
of Trust until removal or resignation;
Since 2008 |
Managing
Director of Rafferty Asset Management, LLC, January 1999 –
January 2019 and Direxion Advisors, LLC, November 2017
–
January 2019.
|
[ ] | None. |
Name,
Address
and Age |
Position(s)
Held with Fund |
Term
of
Office and Length of Time Served |
Principal
Occupation(s) During
Past Five Years |
#
of
Portfolios in Direxion Family of Investment Companies Overseen by Trustee (3) |
Other
Trusteeships/ Directorships Held by Trustee During Past Five Years |
Gerald
E. Shanley III
Age: 75 |
Trustee |
Lifetime
of Trust until removal or resignation;
Since 2008 |
Retired,
since 2002; Business Consultant, 1985-present; Trustee of Trust Under Will of Charles S. Payson, 1987-present; C.P.A., 1979-present.
|
[ ] | None. |
John
A. Weisser
Age: 77 |
Trustee |
Lifetime
of Trust until removal or resignation;
Since 2008 |
Retired, since 1995; Salomon Brothers, Inc., 1971-1995, most recently as Managing Director. | [ ] |
Director
until December 2016: The MainStay Funds Trust, The MainStay Funds, MainStay VP Fund Series, Mainstay Defined Term Municipal Opportunities Fund; Private Advisors Alternative Strategy Fund; Private Advisors Alternative Strategies Master Fund.
|
Name,
Address
and Age |
Position(s)
Held with Fund |
Term
of
Office and Length of Time Served |
Principal
Occupation(s) During
Past Five Years |
#
of
Portfolios in Direxion Family of Investment Companies Overseen by Trustee (3) |
Other
Trusteeships/ Directorships Held by Trustee During Past Five Years |
David
L. Driscoll
Age: 49 |
Trustee |
Lifetime
of Trust until removal or resignation;
Since 2014 |
Partner,
King Associates, LLP, since 2004; Board Advisor, University Common Real Estate, since 2012; Principal, Grey Oaks LLP since 2003; Member, Kendrick LLC, since 2006.
|
[ ] | None. |
Jacob
C. Gaffey
Age: 71 |
Trustee |
Lifetime
of Trust until removal or resignation;
Since 2014 |
Managing
Director of Loomis & Co. since 2012; Partner, Bay Capital Advisors, LLC
2008 – 2012. |
[ ] | None. |
Henry
W. Mulholland
Age: 55 |
Trustee | Lifetime of Trust until removal or resignation; Since 2017 | Grove Hill Partners LLC, since 2016 as Managing Partner; Bank of America Merrill Lynch, 1990-2015, most recently as Managing Director and Head of Equities for Americas. | [ ] | None. |
(1) | Mr. O’Neill is affiliated with Rafferty and Direxion. Mr. O’Neill owns a beneficial interest in Rafferty. |
(2) | The Direxion Family of Investment Companies consists of the Direxion Shares ETF Trust which, as of the date of this SAI, offers for sale to the public [ ] of the [ ] funds registered with the SEC, the Direxion Funds which, as of the date of this SAI, offers for sale to the public 15 funds registered with the SEC and the Direxion Insurance Trust which, as of the date of this SAI, does not have any funds registered with the SEC. |
Name,
Address
and Age |
Position(s)
Held with Fund |
Term
of
Office and Length of Time Served |
Principal
Occupation(s) During
Past Five Years |
#
of
Portfolios in the Direxion Family of Investment Companies Overseen by Trustee (1) |
Other
Trusteeships/
Directorships Held by Trustee During Past Five Years |
Robert
D. Nestor
Age: 50 |
President |
One
Year;
Since 2018 |
President, Rafferty Asset Management, LLC and Direxion Advisors, LLC, since April 2018; Blackrock, Inc. (May 2007-April 2018), most recently as Managing Director. | N/A | N/A |
Patrick
J. Rudnick
Age: 45 |
Principal
Executive
Officer Principal Financial Officer |
One
Year;
Since 2018 One Year; Since 2010 |
Senior
Vice President, since March 2013, Rafferty Asset Management, LLC; Senior Vice President, since November 2017, Direxion Advisors, LLC.
|
N/A | N/A |
Name,
Address
and Age |
Position(s)
Held with Fund |
Term
of
Office and Length of Time Served |
Principal
Occupation(s) During
Past Five Years |
#
of
Portfolios in the Direxion Family of Investment Companies Overseen by Trustee (1) |
Other
Trusteeships/
Directorships Held by Trustee During Past Five Years |
Angela
Brickl
Age: 42 |
Chief
Compliance
Officer Secretary |
One
Year;
Since 2018 One Year; Since 2011 |
General
Counsel, Rafferty Asset Management LLC, since October 2010 and Direxion Advisors, LLC, since November 2017; Chief Compliance Officer, Rafferty Asset Management, LLC, since September 2012 and Direxion Advisors, LLC, since November 2017.
|
N/A | N/A |
(1) | The Direxion Family of Investment Companies consists of the Direxion Shares ETF Trust which, as of the date of this SAI, offers for sale to the public [ ] of the [ ] funds registered with the SEC, the Direxion Funds which, as of the date of this SAI, offers for sale to the public 15 funds registered with the SEC and the Direxion Insurance Trust which, as of the date of this SAI, does not have any funds registered with the SEC. |
Dollar Range of Equity Securities Owned: | Interested Trustee: | Independent Trustees: | ||||
Daniel
D.
O’Neill |
Gerald
E.
Shanley III |
John
Weisser |
David
L.
Driscoll |
Jacob
C.
Gaffey |
Henry W. Mulholland | |
Aggregate Dollar Range of Equity Securities in the Direxion Family of Investment Companies (1) |
Over
$100,000 |
$0 | $1-$10,000 | $0 | $0 | $0 |
(1) | The Direxion Family of Investment Companies consists of the Direxion Shares ETF Trust which, as of the date of this SAI, offers for sale to the public [ ] of the [ ] funds registered with the SEC, the Direxion Funds which, as of the date of this SAI, offers for sale to the public 15 funds registered with the SEC and the Direxion Insurance Trust which, as of the date of this SAI, does not have any funds registered with the SEC. |
Name
of Person,
Position |
Aggregate
Compensation From the Trust (1) |
Pension
or
Retirement Benefits Accrued As Part of the Trust’s Expenses |
Estimated
Annual Benefits Upon Retirement |
Aggregate
Compensation From the Direxion Family of Investment Companies Paid to the Trustees (2) |
Interested Trustee | ||||
Daniel D. O’Neill | $0 | $0 | $0 | $0 |
Independent Trustees | ||||
Gerald E. Shanley III | $93,438 | $0 | $0 | $124,583 |
John A. Weisser | $93,438 | $0 | $0 | $124,583 |
David L. Driscoll | $92,188 | $0 | $0 | $122,917 |
Jacob C. Gaffey | $92,188 | $0 | $0 | $122,917 |
Henry W. Mulholland (3) | $85,938 | $0 | $0 | $114,583 |
Accounts |
Total
Number
of Accounts |
Total
Assets
(In Billions) |
Total
Number of
Accounts with Performance Based Fees |
Total
Assets
of Accounts with Performance Based Fees |
Registered Investment Companies | [ ] | $ [ ] | 0 | $0 |
Other Pooled Investment Vehicles | 0 | $0 | 0 | $0 |
Other Accounts | 0 | $0 | 0 | $0 |
• | Election of Directors – considering all factors such as director qualifications, term of office and age limits. |
• | Proxy Contests – considering factors such as voting nominees in contested elections and reimbursement of expenses. |
• | Election of Auditors – considering factors such as independence and reputation of the auditing firm. |
• | Proxy Contest Defenses – considering factors such as board structure and cumulative voting. |
• | Tender Offer Defenses – considering factors such as poison pills (stock purchase rights plans) and fair price provisions. |
• | Miscellaneous Governance Issues – considering factors such as confidential voting and equal access. |
• | Capital Structure – considering factors such as common stock authorization and stock distributions. |
• | Executive and Director Compensation – considering factors such as performance goals and employee stock purchase plans. |
• | State of Incorporation – considering factors such as state takeover statutes and voting on reincorporation proposals. |
• | Mergers and Corporate Restructuring – considering factors such as spin-offs and asset sales. |
• | Mutual Fund Proxy Voting – considering factors such as election of directors and proxy contests. |
• | Social and Corporate Responsibility Issues – considering factors such as social, environmental, and labor issues. |
Australia | Austria | Belgium | Brazil | Canada | Chile | China | ||||||
January
1
January 28 April 19 April 22 April 25 June 10 December 24 December 25 December 26 December 31 |
January
1
April 19 April 22 May 1 June 10 December 24 December 25 December 26 December 31 |
January
1
April 19 April 22 May 1 May 30 June 10 August 15 November 1 December 24 December 25 December 26 December 31 |
January
1
January 25 March 4 March 5 March 6 April 19 May 1 June 20 July 9 November 15 November 20 December 25 |
January
1
January 2 February 18 April 19 May 20 June 24 July 1 August 5 September 2 October 14 November 11 December 25 December 26 |
January
1
April 19 May 1 May 21 July 16 August 15 September 18 September 19 September 20 October 31 November 1 December 25 December 31 |
January
1
January 21 February 4 February 5 February 6 February 7 February 8 February 18 April 5 April 19 April 22 May 1 May 13 May 27 June 7 July 1 July 4 September 2 September 13 October 1 October 2 October 3 October 4 October 7 October 14 November 11 November 28 December 25 December 26 |
Colombia | Czech Republic | Denmark | Egypt | Finland | France | Germany | ||||||
January
1
January 7 March 25 April 18 April 19 May 1 June 3 June 24 July 1 August 7 August 19 October 14 November 4 November 11 December 25 |
January
1
April 19 April 22 May 1 May 8 July 5 October 28 December 24 December 25 December 26 |
January
1
April 18 April 19 April 22 May 1 May 17 May 30 May 31 June 5 June 10 December 24 December 25 December 26 December 31 |
January
1
January 7 April 25 April 28 April 29 May 1 June 4 June 5 July 1 July 23 August 11 August 12 October 6 |
January
1
April 19 April 22 May 1 May 30 June 21 December 6 December 24 December 25 December 26 December 31 |
January
1
April 19 April 22 May 1 May 30 June 10 August 15 November 1 November 11 December 24 December 25 December 26 December 31 |
January
1
April 19 April 22 May 1 May 30 June 10 June 20 August 15 October 3 October 31 November 1 November 20 December 24 December 25 December 26 December 31 |
Greece | Hong Kong | Hungary | India | Indonesia | Ireland | Israel | ||||||
January
1
March 11 March 25 April 19 April 22 April 26 April 29 May 1 June 17 August 15 October 28 December 24 December 25 December 26 |
January
1
February 4 February 5 February 6 February 7 April 5 April 19 April 22 May 1 May 13 June 7 July 1 October 1 October 7 December 24 December 25 December 26 December 31 |
January
1
March 15 April 19 April 22 May 1 June 10 August 10 August 19 August 20 October 23 November 1 December 7 December 14 December 24 December 25 December 26 December 27 December 31 |
February
19
March 4 March 21 April 1 April 17 April 19 May 1 June 5 August 12 August 15 September 2 September 10 October 2 October 8 October 28 November 12 December 25 |
January
1
February 5 March 7 April 3 April 19 May 1 May 30 June 3 June 4 June 5 June 6 June 7 December 24 December 25 December 31 |
January
1
January 21 February 18 March 18 April 19 April 22 May 1 May 6 May 27 June 3 July 4 August 5 August 26 September 2 October 14 October 28 November 11 November 28 December 24 December 25 December 26 December 31 |
March
21
April 21 April 22 April 23 April 24 April 25 April 26 May 8 May 9 June 9 August 11 September 29 September 30 October 1 October 8 October 9 October 13 October 14 October 15 October 16 October 17 October 20 October 21 |
Italy | Japan | Korea | Malaysia | Mexico | Morocco | The Netherlands | ||||||
January
1
April 19 April 22 May 1 August 15 December 24 December 25 December 26 December 31 |
January
1
January 2 January 3 January 14 February 11 March 21 April 29 April 30 May 1 May 2 May 3 May 6 July 15 August 12 September 16 September 23 October 14 October 22 November 4 December 31 |
January
1
February 4 February 5 February 6 March 1 May 1 May 6 June 6 August 15 September 12 September 13 October 3 October 9 December 25 December 31 |
January
1
January 21 February 1 February 4 February 5 February 6 May 1 May 20 May 22 June 4 June 5 June 6 August 12 September 2 September 9 September 16 October 28 December 25 |
January
1
February 4 March 18 April 18 April 19 May 1 September 16 November 18 December 12 December 25 |
January
1
January 11 May 1 June 4 June 5 July 30 August 12 August 13 August 14 August 20 August 21 September 2 November 6 November 11 November 12 November 18 |
January
1
April 19 April 22 May 1 May 30 June 10 November 1 December 24 December 25 December 26 December 31 |
New Zealand | Norway | Peru | Philippines | Poland | Portugal | Russia | ||||||
January
1
January 2 January 21 January 28 February 6 April 19 April 22 April 25 June 3 October 28 December 25 December 26 |
January
1
April 17 April 18 April 19 April 22 May 1 May 17 May 30 June 10 December 24 December 25 December 26 December 31 |
January
1
April 18 April 19 May 1 July 29 August 30 October 8 November 1 December 25 |
January
1
February 5 February 25 April 9 April 18 April 19 May 1 June 12 August 21 August 26 November 1 December 24 December 25 December 30 December 31 |
January
1
April 19 April 22 May 1 May 3 June 20 August 15 November 1 November 11 December 24 December 25 December 26 December 31 |
January
1
April 19 April 22 April 25 May 1 June 10 June 13 June 20 August 15 November 1 December 25 December 26 |
January
1
January 2 January 3 January 4 January 7 January 8 March 8 May 1 May 2 May 3 May 9 May 10 June 12 November 4 |
Singapore | South Africa | Spain | Sweden | Switzerland | Taiwan | Thailand | ||||||
January
1
February 4 February 5 February 6 April 19 May 1 May 20 June 5 August 9 August 12 October 28 December 25 |
January
1
March 21 April 19 April 22 May 1 June 17 August 9 September 24 December 16 December 25 December 26 |
January
1
March 19 April 18 April 19 April 22 May 1 August 15 November 1 December 6 December 25 December 26 |
January
1
April 18 April 19 April 22 April 30 May 1 May 29 May 30 November 1 December 24 December 25 December 26 December 31 |
January
1
January 2 April 8 April 19 April 22 May 1 May 30 June 10 August 1 September 9 December 24 December 25 December 26 December 31 |
January
1
January 31 February 1 February 4 February 5 February 6 February 7 February 8 February 28 March 1 April 4 April 5 May 1 June 7 September 13 October 10 October 11 |
January
1
February 19 April 8 April 15 April 16 May 1 May 20 July 16 July 29 August 12 October 14 October 23 December 5 December 10 December 31 |
Turkey | United Kingdom | |
January
1
April 23 May 1 June 3 June 4 June 5 June 6 July 15 August 12 August 13 August 14 August 30 October 28 October 29 |
January
1
January 21 February 18 April 19 April 22 May 1 May 6 May 27 July 4 August 26 September 2 October 14 November 11 November 28 December 24 December 25 December 26 December 31 |
• | The likelihood of payment--the capacity and willingness of the obligor to meet its financial commitments on an obligation in accordance with the terms of the obligation; |
• | The nature and provisions of the financial obligation, and the promise we impute; and |
• | The protection afforded by, and relative position of, the financial obligation in the event of a bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors' rights. |
• | Amortization schedule--the larger the final maturity relative to other maturities, the more likely it will be treated as a note; and |
• | Source of payment--the more dependent the issue is on the market for its refinancing, the more likely it will be treated as a note. |
DIREXION SHARES ETF TRUST
PART C
OTHER INFORMATION
Item 28. Exhibits
(a) | (i) | Certificate of Trust dated April 23, 2008 is herein incorporated by reference from the Direxion Shares ETF Trusts (the Trust) Initial Registration Statement on Form N-1A filed with the Securities and Exchange Commission (SEC) on April 30, 2008. | ||
(ii) | Trust Instrument is herein incorporated by reference from the Pre-Effective Amendment No. 1 to the Trusts Registration Statement filed on Form N-1A with the SEC on August 20, 2008. | |||
(b) | Amended and Restated By-Laws dated February 14, 2019 is herein incorporated by reference from the Post-Effective Amendment No. 239 to the Trusts Registration Statement filed on Form N-1A with the SEC on February 26, 2019. | |||
(c) | Shareholders Rights are contained in Articles IV, V, VI, IX, and X of the Trusts Trust Instrument and Articles V, VI, VII, VIII and IX of the Trusts By-Laws. | |||
(d) | (i)(A) | Investment Advisory Agreement between the Trust and Rafferty Asset Management, LLC (RAM) dated August 13, 2008 is herein incorporated by reference from the Post-Effective Amendment No. 171 to the Trusts Registration Statement filed on Form N-1A with the SEC on October 19, 2016. | ||
(i)(B) | Amended Schedule A to the Investment Advisory Agreement between the Trust and RAM to be filed by amendment. | |||
(i)(C) | Investment Advisory Agreement between the Trust and Direxion Advisors, LLC (DAL) dated November 21, 2017 is herein incorporated by reference from the Post-Effective Amendment No. 204 to the Trusts Registration Statement filed on Form N-1A with the SEC on January 17, 2018. | |||
(i)(D) | Amended Schedule A to the Investment Advisory Agreement between the Trust and DAL is herein incorporated by reference from the Post-Effective Amendment No. 240 to the Trusts Registration Statement filed on Form N-1A with the SEC on February 27, 2019. | |||
(e) | (i)(A) | Distribution Agreement between the Trust and Foreside Fund Services, LLC (Foreside) dated March 31, 2009 is herein incorporated by reference from the Post-Effective Amendment No. 171 to the Trusts Registration Statement filed on Form N-1A with the SEC on October 19, 2016. | ||
(i)(B) | Amended Appendix A to the Distribution Agreement to be filed by amendment. | |||
(ii) | Form of Authorized Participant Agreement is herein incorporated by reference from the Pre-Effective Amendment No. 1 to the Trusts Registration Statement filed on Form N-1A with the SEC on August 20, 2008. | |||
(f) | Bonus, profit sharing contracts None. |
1
(g) | (i)(A) | Form of Custody Agreement between the Trust and The Bank of New York (BONY) is herein incorporated by reference from the Pre-Effective Amendment No. 1 to the Trusts Registration Statement filed on Form N-1A with the SEC on August 20, 2008. | ||
(i)(B) | Tenth Amended Schedule II to the Custody Agreement is herein incorporated by reference from the Post-Effective Amendment No. 133 to the Trusts Registration Statement filed on Form N-1A with the SEC on June 3, 2015. | |||
(ii) | Custody Agreement between the Trust and U.S Bank National Association is herein incorporated by reference from the Post-Effective Amendment No. 89 to the Trusts Registration Statement filed on Form N-1A with the SEC on September 16, 2013. | |||
(h) | (i)(A) | Form of Transfer Agency and Service Agreement between the Trust and BONY is herein incorporated by reference from the Pre-Effective Amendment No. 1 to the Trusts Registration Statement filed on Form N-1A with the SEC on August 20, 2008. | ||
(i)(B) | Ninth Amended Appendix I to the Transfer Agency and Service Agreement is herein incorporated by reference from the Post-Effective Amendment No. 133 to the Trusts Registration Statement filed on Form N-1A with the SEC on June 3, 2015. | |||
(ii) | Transfer Agent Servicing Agreement between the Trust and U.S. Bancorp Fund Services, LLC is herein incorporated by reference from the Post-Effective Amendment No. 89 to the Trusts Registration Statement filed on Form N-1A with the SEC on September 16, 2013. | |||
(iii) | Fund Administration Agreement between the Trust and U. S. Bancorp Fund Services, LLC is herein incorporated by reference from the Post-Effective Amendment No. 80 to the Trusts Registration Statement filed on Form N-1A with the SEC on November 30, 2012. | |||
(iv)(A) | Fund Accounting Agreement between the Trust and BONY is herein incorporated by reference from the Post-Effective Amendment No. 80 to the Trusts Registration Statement filed on Form N-1A with the SEC on November 30, 2012. | |||
(iv)(B) | Amended Exhibit A to the Fund Accounting Agreement between the Trust and BONY is herein incorporated by reference from the Post-Effective Amendment No. 133 to the Trusts Registration Statement filed on Form N-1A with the SEC on June 3, 2015. | |||
(v) | Fund Accounting Agreement between the Trust and U.S. Bancorp Fund Services, LLC is herein incorporated by reference from the Post-Effective Amendment No. 89 to the Trusts Registration Statement filed on Form N-1A with the SEC on September 16, 2013. | |||
(vi)(A) | Advisory Fee Waiver Agreement between the Trust and RAM is herein incorporated by reference from the Post-Effective Amendment No. 69 to the Trusts Registration Statement filed on Form N-1A with the SEC on June 13, 2012. | |||
(vi)(B) | Amended Schedule A to the Advisory Fee Waiver Agreement between the Trust and RAM to be filed by amendment. | |||
(vi)(C) | Advisory Fee Waiver Agreement between the Trust and DAL is herein incorporated by reference from the Post-Effective Amendment No. 204 to the Trusts Registration Statement filed on Form N-1A with the SEC on January 17, 2018. | |||
(vi)(D) | Amended Schedule A to the Advisory Fee Waiver Agreement between the Trust and DAL is herein incorporated by reference from the Post-Effective Amendment No. 240 to the Trusts Registration Statement filed on Form N-1A with the SEC on February 27, 2019. |
2
(vii)(A) | Fourth Amended and Restated Operating Expense Limitation Agreement between the Trust and RAM filed herewith. | |||
(vii)(B) | Amended Appendix A to the Fourth Amended and Restated Operating Expense Limitation Agreement between the Trust and RAM to be filed by amendment. | |||
(vii)(C) | Operating Expense Limitation Agreement between the Trust and DAL is herein incorporated by reference from the Post-Effective Amendment No. 204 to the Trusts Registration Statement filed on Form N-1A with the SEC on January 17, 2018. | |||
(vii)(D) | Amended Appendix A to the Operating Expense Limitation Agreement between the Trust and DAL is herein incorporated by reference from the Post-Effective Amendment No. 240 to the Trusts Registration Statement filed on Form N-1A with the SEC on February 27, 2019. | |||
(viii)(A) | Management Services Agreement between the Trust and RAM is herein incorporated by reference from the Post-Effective Amendment No. 155 to the Trusts Registration Statement filed on Form N-1A with the SEC on December 18, 2015. | |||
(viii)(B) | Amended Schedule A to the Management Services Agreement between the Trust and RAM to be filed by amendment. | |||
(viii)(C) | Management Services Agreement between the Trust and DAL is herein incorporated by reference from the Post-Effective Amendment No. 204 to the Trusts Registration Statement filed on Form N-1A with the SEC on January 17, 2018. | |||
(viii)(D) | Amended Schedule A to the Management Services Agreement between the Trust and DAL is herein incorporated by reference from the Post-Effective Amendment No. 240 to the Trusts Registration Statement filed on Form N-1A with the SEC on February 27, 2019. | |||
(i) | Opinion and consent of counsel to be filed by amendment. | |||
(j) | (i) | Power of Attorney and Certified Resolutions filed herewith. | ||
(k) | Financial Statements omitted from prospectus None. | |||
(l) | Initial Capital Agreement is herein incorporated by reference from the Pre-Effective Amendment No. 1 to the Trusts Registration Statement filed on Form N-1A with the SEC on August 20, 2008. | |||
(m) | (i)(A) | Rule 12b-1 Distribution Plan is herein incorporated by reference from the Pre-Effective Amendment No. 1 to the Trusts Registration Statement filed on Form N-1A with the SEC on August 20, 2008. | ||
(i)(B) | Amended Appendix A to the Rule 12b-1 Distribution Plan to be filed by amendment. | |||
(n) | Rule 18f-3 Plan None. | |||
(o) | Reserved. | |||
(p) | Code of Ethics for the Direxion Funds, Direxion Insurance Trust, Direxion Shares ETF Trust, Rafferty Asset Management, LLC, and Direxion Advisors LLC is herein incorporated by reference from the Post-Effective Amendment No. 232 to the Trusts Registration Statement filed on Form N-1A with the SEC on December 28, 2018. |
3
Item 29. Persons Controlled by or Under Common Control with Registrant
Immediately prior to the public offering of the Registrants shares for each series, the following persons may be deemed individually to control the Funds or the Trust:
Rafferty Asset Management, LLC will be the sole shareholder immediately prior to the public offering of each Fund.
Item 30. Indemnification
Article IX of the Trust Instrument of the Registrant provides as follows:
Section 1. LIMITATION OF LIABILITY. All persons contracting with or having any claim against the Trust or a particular Series shall look only to the assets of the Trust or Assets belonging to such Series, respectively, for payment under such contract or claim; and neither the Trustees nor any of the Trusts officers or employees, whether past, present or future, shall be personally liable therefor. Every written instrument or obligation on behalf of the Trust or any Series may contain a statement to the foregoing effect, but the absence of such statement shall not operate to make any Trustee or officer of the Trust liable thereunder. Provided they have exercised reasonable care and have acted under the reasonable belief that their actions are in the best interest of the Trust, the Trustees and officers of the Trust shall not be responsible or liable for any act or omission or for neglect or wrongdoing of them or any officer, agent, employee, investment adviser, principal underwriter or independent contractor of the Trust, but nothing contained in this Trust Instrument or in the Delaware Act shall protect any Trustee or officer of the Trust against liability to the Trust or to Shareholders to which he or she would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office.
Section 2. INDEMNIFICATION.
(a) |
Subject to the exceptions and limitations contained in subsection (b) below: |
(i) |
every person who is, or has been, a Trustee or an officer, employee or agent of the Trust, including persons who act at the request of the Trust as directors, trustees, officers, employees or agents of another organization in which the Trust has an interest as a shareholder, creditor or otherwise (Covered Person) shall be indemnified by the Trust or the appropriate Series to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by him or her in connection with any claim, action, suit or proceeding in which he or she becomes involved as a party or otherwise by virtue of his or her being or having been a Covered Person and against amounts paid or incurred by him or her in the settlement thereof. |
(ii) |
as used herein, the words claim, action, suit or proceeding shall apply to all claims, actions, suits or proceedings (civil, criminal or other, including appeals), actual or threatened, and the words liability and expenses shall include, without limitation, counsel fees, costs, judgments, amounts paid in settlement, fines, penalties and other liabilities. |
(b) |
No indemnification shall be provided hereunder to a Covered Person: |
(i) |
who shall have been adjudicated by a court or body before which the proceeding was brought (A) to be liable to the Trust or its Shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office or (B) not to have acted in good faith in the reasonable belief that his or her action was in the best interest of the Trust; or |
(ii) |
in the event of a settlement, if there has been a determination that such Covered Person engaged in willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office: (A) by the court or other body approving the settlement; (B) by at least a majority of those Trustees who are neither Interested Persons of the Trust nor are parties to the matter based upon a review of readily available facts (as opposed to a full trial-type inquiry); or (C) by written opinion of independent legal counsel based upon a review of readily available facts (as opposed to a full trial-type inquiry). |
4
(c) |
The rights of indemnification herein provided may be insured against by policies maintained by the Trust, shall be severable, shall not be exclusive of or affect any other rights to which any Covered Person may now or hereafter be entitled and shall inure to the benefit of the heirs, executors and administrators of a Covered Person. Nothing contained herein shall affect any rights to indemnification to which Trust personnel other than Covered Persons may be entitled by contract or otherwise under law. |
(d) |
To the maximum extent permitted by applicable law, expenses in connection with the preparation and presentation of a defense to any claim, action, suit or proceeding of the character described in subsection (a) of this Section shall be paid by the Trust or applicable Series from time to time prior to final disposition thereof upon receipt of an undertaking by or on behalf of such Covered Person that such amount will be paid over by him or her to the Trust or applicable Series if it is ultimately determined that he or she is not entitled to indemnification under this Section. |
(e) |
Any repeal or modification of this Article IX by the Shareholders, or adoption or modification of any other provision of this Trust Instrument or the By-laws inconsistent with this Article, shall be prospective only, to the extent that such, repeal or modification would, if applied retrospectively, adversely affect any limitation on the liability of any Covered Person or indemnification available to any Covered Person with respect to any act or omission which occurred prior to such repeal, modification or adoption. |
Section 3. INDEMNIFICATION OF SHAREHOLDERS. If any Shareholder or former Shareholder of any Series is held personally liable solely by reason of his or her being or having been a Shareholder and not because of his or her acts or omissions or for some other reason, the Shareholder or former Shareholder (or his or her heirs, executors, administrators or other legal representatives or, in the case of any entity, its general successor) shall be entitled out of the Assets belonging to the applicable Series to be held harmless from and indemnified against all loss and expense arising from such liability. The Trust, on behalf of the affected Series, shall, upon request by such Shareholder or former Shareholder, assume the defense of any claim made against him or her for any act or obligation of the Series and satisfy any judgment thereon from the Assets belonging to the Series.
Article IX, Section 3 of the By-laws of the Registrant provides as follows:
Section 3. Advance Payment of Indemnifiable Expenses. Expenses incurred by an agent in connection with the preparation and presentation of a defense to any proceeding may be paid by the Trust from time to time prior to final disposition thereof upon receipt of an undertaking by, or on behalf of, such agent that such amount will be paid over by him or her to the Trust if it is ultimately determined that he or she is not entitled to indemnification; provided, however, that (a) such agent shall have provided appropriate security for such undertaking, (b) the Trust is insured against losses arising out of any such advance payments, or (c) either a majority of the Trustees who are neither Interested Persons of the Trust nor parties to the proceeding, or independent legal counsel in a written opinion, shall have determined, based upon a review of the readily available facts (as opposed to a trial-type inquiry or full investigation), that there is reason to believe that such agent will be found entitled to indemnification.
Section 7 of the Investment Advisory Agreement provides as follows:
The Adviser shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Trust or any Fund in connection with the matters to which this Agreement relate except a loss resulting from the willful misfeasance, bad faith or gross negligence on its part in the performance of its duties or from reckless disregard by it of its obligations and duties under this Agreement. Any person, even though also an officer, partner, employee, or agent of the Adviser, who may be or become an officer, trustee, employee or agent of the Trust shall be deemed, when rendering services to the Trust or acting in any business of the Trust, to be rendering such services to or acting solely for the Trust and not as an officer, partner, employee, or agent or one under the control or direction of the Adviser even though paid by it.
5
Section 6 of the Distribution Agreement provides as follows:
(a) The Trust agrees to indemnify and hold harmless the Distributor, its affiliates and each of their directors, officers and employees and agents and any person who controls the Distributor within the meaning of Section 15 of the 1933 Act (any of the Distributor, its officers, employees, agents and directors or such control persons, for purposes of this paragraph, a Distributor Indemnitee) against any loss, liability, claim, damages or expense (including the reasonable cost of investigating or defending any alleged loss, liability, claim, damages or expense and reasonable counsel fees incurred in connection therewith) arising out of or based upon (i) any claim that the Registration Statement, Prospectus, Statement of Additional Information, Product Description, shareholder reports, sales literature and advertisements specifically approved by the Trust and Investment Adviser or other information filed or made public by the Trust (as from time to time amended) included an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein (and in the case of the Prospectus, Statement of Additional Information and Product Description, in light of the circumstances under which they were made) not misleading under the 1933 Act, or any other statute or the common law, (ii) the breach by the Trust of any obligation, representation or warranty contained in this Agreement or (iii) the Trusts failure to comply in any material respect with applicable securities laws.
The Trust does not agree to indemnify the Distributor or hold it harmless to the extent that the statement or omission was made in reliance upon, and in conformity with, information furnished to the Trust by or on behalf of the Distributor. The Trust will also not indemnify any Distributor Indemnitee with respect to any untrue statement or omission made in the Registration Statement, Prospectus, Statement of Additional Information or Product Description that is subsequently corrected in such document (or an amendment thereof or supplement thereto) if a copy of the Prospectus (or such amendment or supplement) was not sent or given to the person asserting any such loss, liability, claim, damage or expense at or before the written confirmation to such person in any case where such delivery is required by the 1933 Act and the Trust had notified the Distributor of the amendment or supplement prior to the sending of the confirmation. In no case (i) is the indemnity of the Trust in favor of any Distributor Indemnitee to be deemed to protect the Distributor Indemnitee against any liability to the Trust or its shareholders to which the Distributor Indemnitee would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations under this Agreement, or (ii) is the Trust to be liable under its indemnity agreement contained in this Section with respect to any claim made against any Distributor Indemnitee unless the Distributor Indemnitee shall have notified the Trust in writing of the claim within a reasonable time after the summons or other first written notification giving information of the nature of the claim shall have been served upon Distributor Indemnitee (or after Distributor Indemnitee shall have received notice of service on any designated agent).
Failure to notify the Trust of any claim shall not relieve the Trust from any liability that it may have to any Distributor Indemnitee against whom such action is brought unless failure or delay to so notify the Trust prejudices the Trusts ability to defend against such claim. The Trust shall be entitled to participate at its own expense in the defense, or, if it so elects, to assume the defense of any suit brought to enforce any claims, but if the Trust elects to assume the defense, the defense shall be conducted by counsel chosen by it and satisfactory to Distributor Indemnitee, defendant or defendants in the suit. In the event the Trust elects to assume the defense of any suit and retain counsel, Distributor Indemnitee, defendant or defendants in the suit, shall bear the fees and expenses of any additional counsel retained by them. If the Trust does not elect to assume the defense of any suit, it will reimburse the Distributor Indemnitee, defendant or defendants in the suit, for the reasonable fees and expenses of any counsel retained by them. The Trust agrees to notify the Distributor promptly of the commencement of any litigation or proceedings against it or any of its officers or Trustees in connection with the issuance or sale of any of the Creation Units or the Shares.
(b) The Distributor agrees to indemnify and hold harmless the Trust and each of its Trustees and officers and any person who controls the Trust within the meaning of Section 15 of the 1933 Act (for purposes of this paragraph, the Trust and each of its Trustees and officers and its controlling persons are collectively referred to as the Trust Affiliates) against any loss, liability, claim, damages or expense (including the reasonable cost of investigating or defending any alleged loss, liability, claim, damages or expense and reasonable counsel fees incurred in connection therewith) arising out of or based upon (i) the allegation of any wrongful
6
act of the Distributor or any of its directors, officers, employees, (ii) the breach of any obligation, representation or warranty pursuant to this Agreement by the Distributor, (iii) the Distributors failure to comply in any material respect with applicable securities laws, including applicable FINRA regulations, or (iv) any allegation that the Registration Statement, Prospectus, Statement of Additional Information, Product Description, shareholder reports, any information or materials relating to the Funds (as described in section 3(g)) or other information filed or made public by the Trust (as from time to time amended) included an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements not misleading, insofar as such statement or omission was made in reliance upon, and in conformity with information furnished to the Trust by or on behalf of the Distributor, it being understood that the Trust will rely upon certain information provided by the Distributor for use in the preparation of the Registration Statement, Prospectus, Statement of Additional Information, Product Description, shareholder reports or other information relating to the Funds or made public by the Trust.
In no case (i) is the indemnity of the Distributor in favor of any Trust Affiliate to be deemed to protect any Trust Affiliate against any liability to the Trust or its security holders to which such Trust Affiliate would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties under this Agreement, or (ii) is the Distributor to be liable under its indemnity agreement contained in this Section with respect to any claim made against any Trust Affiliate unless the Trust Affiliate shall have notified the Distributor in writing of the claim within a reasonable time after the summons or other first written notification giving information of the nature of the claim shall have been served upon the Trust Affiliate (or after the Trust Affiliate shall have received notice of service on any designated agent).
Failure to notify the Distributor of any claim shall not relieve the Distributor from any liability that it may have to the Trust Affiliate against whom such action is brought unless failure or delay to so notify the Distributor prejudices the Distributors ability to defend against such claim. The Distributor shall be entitled to participate at its own expense in the defense or, if it so elects, to assume the defense of any suit brought to enforce the claim, but if the Distributor elects to assume the defense, the defense shall be conducted by counsel chosen by it and satisfactory to the Trust, its officers and Board and to any controlling person or persons, defendant or defendants in the suit. In the event that Distributor elects to assume the defense of any suit and retain counsel, the Trust or controlling person or persons, defendant or defendants in the suit, shall bear the fees and expenses of any additional counsel retained by them. If the Distributor does not elect to assume the defense of any suit, it will reimburse the Trust, its officers and Trustees or controlling person or persons, defendant or defendants in the suit, for the reasonable fees and expenses of any counsel retained by them. The Distributor agrees to notify the Trust promptly of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of any of the Creation Units or the Shares.
(c) No indemnified party shall settle any claim against it for which it intends to seek indemnification from the indemnifying party, under the terms of section 6(a) or 6(b) above, without the prior written notice to and consent from the indemnifying party, which consent shall not be unreasonably withheld. No indemnified or indemnifying party shall settle any claim unless the settlement contains a full release of liability with respect to the other party in respect of such action. This section 6 shall survive the termination of this Agreement.
Section 13 of the Authorized Participant Agreement provides as follows:
(a) The Participant hereby agrees to indemnify and hold harmless the Distributor, the Funds, the Index Receipt Agent, their respective subsidiaries, affiliates, directors, officers, employees, and agents, and each person, if any, who controls such persons within the meaning of Section 15 of the 1933 Act (each an Indemnified Party), from and against any loss, liability, cost, or expense (including attorneys fees) incurred by such Indemnified Party as a result of (i) any breach by the Participant of any provision of this Agreement; (ii) any failure on the part of the Participant to perform any of its obligations set forth in this Agreement; (iii) any failure by the Participant to comply with applicable laws, including rules and regulations of self-regulatory organizations; (iv) actions of such Indemnified Party in reliance upon any instructions issued in accordance with the Fund Documents, AP Handbook or Annex II (as each may be amended from time to time) reasonably believed by the Distributor and/or the Index Receipt Agent to be genuine and to have been
7
given by the Participant; or (v) the Participants failure to complete a Purchase Order or Redemption Order that has been accepted. The Participant understands and agrees that the Funds as third party beneficiaries to this Agreement are entitled to proceed directly against the Participant in the event that the Participant fails to honor any of its obligations under this Agreement that benefit the Fund. The Distributor shall not be liable to the Participant for any damages arising out of mistakes or errors in data provided to the Distributor, or out of interruptions or delays of communications with the Indemnified Parties who are service providers to the Fund, nor is the Distributor liable for any action, representation, or solicitation made by the wholesalers of the Fund.
(b) The Distributor hereby agrees to indemnify and hold harmless the Participant and the Index Receipt Agent, their respective subsidiaries, affiliates, directors, officers, employees, and agents, and each person, if any, who controls such persons within the meaning of Section 15 of the 1933 Act (each an Indemnified Party), from and against any loss, liability, cost, or expense (including attorneys fees) incurred by such Indemnified Party as a result of (i) any breach by the Distributor of any provision of this Agreement; (ii) any failure on the part of the Distributor to perform any of its obligations set forth in this Agreement; (iii) any failure by the Distributor to comply with applicable laws, including rules and regulations of self-regulatory organizations; or (iv) actions of such Indemnified Party in reliance upon any representations made in accordance with the Fund Documents and AP Handbook (as e ach may be amended from time to time) reasonably believed by the Participant to be genuine and to have been given by the Distributor. The Participant shall not be liable to the Distributor for any damages arising out of mistakes or errors in data provided to the Participant, or out of interruptions or delays of communications with the Indemnified Parties who are service providers to the Fund, nor is the Participant liable for any action, representation, or solicitation made by the wholesalers of the Fund.
(c) The Funds, the Distributor, the Index Receipt Agent, or any person who controls such persons within the meaning of Section 15 of the 1933 Act, shall not be liable to the Participant for any damages arising from any differences in performance between the Deposit Securities in a Fund Deposit and the Funds benchmark index.
The general effect of this Indemnification will be to indemnify the officers, trustees, employees and agents of the Registrant from costs and expenses arising from any action, suit or proceeding to which they may be made a party by reason of their being or having been a trustee, officer, employee or agent of the Registrant, except where such action is determined to have arisen out of the willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the trustees, officers, employees or agents office.
Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to trustees, officers and controlling persons of the Registrant pursuant to the foregoing or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a trustee, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such trustee, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
Item 31. Business and Other Connections of Investment Adviser
Rafferty Asset Management, LLC (Rafferty) provides investment advisory services to the Trust. Rafferty was organized as a New York limited liability corporation in June 1997.
Direxion Advisors, LLC (DAL) provides investment advisory services to certain series of the Trust. DAL was organized as a Delaware limited liability corporation in October 2017. DAL is a wholly owned subsidiary of Rafferty.
Lawrence C. Rafferty controls Rafferty through his ownership in Rafferty Holdings, LLC. Rafferty and DALs offices are located at 1301 Avenue of the Americas (6th Avenue), 28th Floor, New York, New York 10019. Information as to the directors and officers of Rafferty is included in its current Form ADV filed with the SEC (File No. 801-54679) and will be included in DALs Form ADV to be filed with the SEC.
8
Item 32. Principal Underwriter
(a) Foreside Fund Services, LLC, the Registrants principal underwriter, also serves as principal underwriter for the following investment companies registered under the Investment Company Act of 1940, as amended: ABS Long/Short Strategies Fund, Absolute Shares Trust, Active Weighting Funds ETF Trust, AdvisorShares Trust, AmericaFirst Quantitative Funds, American Beacon Funds, American Beacon Select Funds, American Century ETF Trust, ARK ETF Trust, Avenue Mutual Funds Trust, BP Capital TwinLine Energy Fund, Series of Professionally Managed Portfolios, BP Capital TwinLine MLP Fund, Series of Professionally Managed Portfolios, Braddock Multi-Strategy Income Fund, Series of Investment Managers Series Trust, Bridgeway Funds, Inc., Brinker Capital Destinations Trust, Calvert Ultra-Short Duration Income NextShares, Series of Calvert Management Series, Center Coast MLP & Infrastructure Fund, Center Coast MLP Focus Fund, Series of Investment Managers Series Trust, Context Capital Funds, CornerCap Group of Funds, Davis Fundamental ETF Trust, Direxion Shares ETF Trust, Eaton Vance NextShares Trust, Eaton Vance NextShares Trust II, EIP Investment Trust, Elkhorn ETF Trust, EntrepreneurShares Series Trust, Evanston Alternative Opportunities Fund, Exchange Listed Funds Trust (f/k/a Exchange Traded Concepts Trust II), FEG Absolute Access Fund I LLC, Fiera Capital Series Trust, FlexShares Trust, Forum Funds, Forum Funds II, FQF Trust, Friess Small Cap Growth Fund, Series of Managed Portfolio Series, GraniteShares ETF Trust, Guinness Atkinson Funds, Horizons ETF Trust, Horizons ETF Trust I (f/k/a Recon Capital Series Trust), Infinity Core Alternative Fund, Innovator IBD ® 50 ETF, Series of Innovator ETFs Trust, Innovator IBD ® ETF Leaders ETF, Series of Innovator ETFs Trust, Ironwood Institutional Multi-Strategy Fund LLC, Ironwood Multi-Strategy Fund LLC, John Hancock Exchange-Traded Fund Trust, Manor Investment Funds, Miller/Howard Funds Trust, Miller/Howard High Income Equity Fund, Moerus Worldwide Value Fund, Series of Northern Lights Fund Trust IV, MProved Systematic Long-Short Fund, Series Portfolios Trust, MProved Systematic Merger Arbitrage Fund, Series Portfolios Trust, MProved Systematic Multi-Strategy Fund, Series Portfolios Trust, OSI ETF Trust, Palmer Square Opportunistic Income Fund, Partners Group Private Income Opportunities, LLC, PENN Capital Funds Trust, Performance Trust Mutual Funds, Series of Trust for Professional Managers, Pine Grove Alternative Institutional Fund, Plan Investment Fund, Inc., PMC Funds, Series of Trust for Professional Managers, Point Bridge GOP Stock Tracker ETF, Series of ETF Series Solutions, Quaker Investment Trust, Ranger Funds Investment Trust, Renaissance Capital Greenwich Funds, RMB Investors Trust (f/k/a Burnham Investors Trust), Robinson Opportunistic Income Fund, Series of Investment Managers Series Trust, Robinson Tax Advantaged Income Fund, Series of Investment Managers Series Trust, Salient MF Trust, SharesPost 100 Fund, Sound Shore Fund, Inc., Steben Alternative Investment Funds, Steben Select Multi-Strategy Fund, Strategy Shares, The 504 Fund (f/k/a The Pennant 504 Fund), The Chartwell Funds, The Community Development Fund, The Relative Value Fund, Third Avenue Trust, Third Avenue Variable Series Trust, TIFF Investment Program, Transamerica ETF Trust, U.S. Global Investors Funds, VictoryShares Developed Enhanced Volatility Wtd ETF, Series of Victory Portfolios II, VictoryShares Dividend Accelerator ETF, Series of Victory Portfolios II, VictoryShares Emerging Market High Div Volatility Wtd ETF, Series of Victory Portfolios II, VictoryShares Emerging Market Volatility Wtd ETF, Series of Victory Portfolios II, VictoryShares International High Div Volatility Wtd ETF, Series of Victory Portfolios II, VictoryShares International Volatility Wtd ETF, Series of Victory Portfolios II, VictoryShares US 500 Enhanced Volatility Wtd ETF, Series of Victory Portfolios II, VictoryShares US 500 Volatility Wtd ETF, Series of Victory Portfolios II, VictoryShares US Discovery Enhanced Volatility Wtd ETF, Series of Victory Portfolios II, VictoryShares US EQ Income Enhanced Volatility Wtd ETF, Series of Victory Portfolios II, VictoryShares US Large Cap High Div Volatility Wtd ETF, Series of Victory Portfolios II, VictoryShares US Multi-Factor Minimum Volatility ETF, Series of Victory Portfolios II, VictoryShares US Small Cap High Div Volatility Wtd ETF, Series of Victory Portfolios II, VictoryShares US Small Cap Volatility Wtd ETF, Series of Victory Portfolios II, Vivaldi Opportunities Fund, West Loop Realty Fund, Series of Investment Managers Series Trust (f/k/a Chilton Realty Income & Growth Fund), Wintergreen Fund, Inc., WisdomTree Trust, and WST Investment Trust.
(b) The following table identifies the officers of Foreside and their positions, if any, with the Registrant. The business address of each of these individuals is also indicated below.
9
Name |
Business Address |
Position with Underwriter |
Position
|
|||
Richard J. Berthy |
Three Canal Plaza, Suite 100, Portland, Maine 04101 |
President, Treasurer and Manager | None | |||
Mark A. Fairbanks |
Three Canal Plaza, Suite 100, Portland, Maine 04101 |
Vice President | None | |||
Jennifer K. DiValerio |
899 Cassatt Road, 400 Berwyn Park, Suite 110, Berwyn, PA 19312 |
Vice President | None | |||
Nanette K. Chern |
Three Canal Plaza, Suite 100, Portland, Maine 04101 |
Vice President and Chief Compliance Officer |
None | |||
Jennifer E. Hoopes |
Three Canal Plaza, Suite 100, Portland, Maine 04101 |
Secretary | None |
(c) Not applicable.
Item 33. Location of Accounts and Records
The books and records required to be maintained by Section 31(a) of the Investment Company Act of 1940, as amended, (the 1940 Act) are maintained in the physical possession of the Direxion Shares ETF Trusts investment adviser, subadviser, administrator, custodian, subcustodian, or transfer agent.
Item 34. Management Services
Not applicable.
Item 35. Undertakings
Not applicable.
10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended (the Securities Act), and the 1940 Act, the Registrant has duly caused this Post-Effective Amendment No. 243 to its Registration Statement on Form N-1A to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York and the State of New York on June 10, 2019.
DIREXION SHARES ETF TRUST | ||
By: |
/s/ Patrick J. Rudnick* |
|
Patrick J. Rudnick | ||
Principal Executive Officer |
Pursuant to the requirements of the Securities Act, this Post-Effective Amendment No. 243 to its Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
Signature |
Title |
Date |
||||
/s/ Daniel D. ONeill* |
Chairman of the Board | June 10, 2019 | ||||
Daniel D. ONeill | ||||||
/s/ Gerald E. Shanley III* |
Trustee | June 10, 2019 | ||||
Gerald E. Shanley III | ||||||
/s/ John Weisser* |
Trustee | June 10, 2019 | ||||
John Weisser | ||||||
/s/ Jacob C. Gaffey* |
Trustee | June 10, 2019 | ||||
Jacob C. Gaffey | ||||||
/s/ David L. Driscoll* |
Trustee | June 10, 2019 | ||||
David L. Driscoll | ||||||
/s/ Henry W. Mulholland* |
Trustee | June 10, 2019 | ||||
Henry W. Mulholland | ||||||
/s/ Patrick J. Rudnick* |
Principal Executive Officer | June 10, 2019 | ||||
Patrick J. Rudnick | and Principal Financial Officer | |||||
*By: /s/ Angela Brickl |
||||||
Attorney-In-Fact pursuant to the Power of Attorney filed herewith as exhibit (j). |
INDEX TO EXHIBITS
Exhibit Number |
Description | |
(h)(vii)(A) | Fourth Amended and Restated Operating Expense Limitation Agreement | |
(j) | Power of Attorney and Certified Resolutions |
FOURTH AMENDED AND RESTATED
OPERATING EXPENSE LIMITATION AGREEMENT
DIREXION SHARES ETF TRUST
THIS OPERATING EXPENSE LIMITATION AGREEMENT (the Agreement), amends and restates the Operating Expense Limitation Agreement dated May 20, 2009, by and between DIREXION SHARES ETF TRUST, a Delaware statutory trust (the Trust), on behalf of each of the series listed on Appendix A hereto (each a Fund and collectively, the Funds), as such schedule may be amended from time to time, and the adviser of the Funds, Rafferty Asset Management, LLC, a New York limited liability corporation (the Adviser), is effective as to each Fund, as of the effective date listed on Appendix A.
WHEREAS, the Funds are responsible for, and have assumed the obligation for, payment of all of their expenses, including pursuant to a certain Investment Advisory Agreement and the Management Services Agreement between the Adviser and the Trust with respect to each Fund; and
WHEREAS, the Adviser renders advice to the Funds pursuant to the Investment Advisory Agreement and services to the Funds pursuant to a Management Services Agreement, each between the Trust and the Adviser; and
WHEREAS, the Adviser desires to limit the Funds Total Annual Fund Operating Expenses (as that term is defined below in Paragraph 2 of this Agreement) pursuant to this Agreement, and the Trust (on behalf of the Funds) desires to allow the Adviser to implement such limits;
NOW THEREFORE, in consideration of the covenants and the mutual premises hereinafter set forth, the parties, intending to be legally bound hereby, mutually agree as follows:
1. |
Limit On Total Annual Fund Operating Expenses . The Adviser hereby agrees to limit each Funds Total Annual Fund Operating Expenses to an annual rate, expressed as a percentage of the Funds average daily net assets, to the amounts listed in Appendix A (the Annual Limits). In the event that the Total Annual Fund Operating Expenses of a Fund, as accrued monthly, exceed its Annual Limit (the amount of such excess, the Reimbursement), the Adviser will waive its fee under the Investment Advisory Agreement and/or Management Services Agreement and within 30 days of receiving notice of the Reimbursement, pay Fund expenses to the extent necessary to cover the Reimbursement. |
2. |
Definition . For purposes of this Agreement, the term Total Annual Fund Operating Expenses with respect to each Fund is defined to include all fees and expenses of the Fund necessarily or appropriately incurred in connection with the operation of the Fund. For avoidance of doubt, the term Total Annual Fund Operating Expenses does not include any front-end or contingent deferred sales loads, taxes, swap financing and related costs, dividends or interest on short positions, other interest expenses, brokerage commissions, expenses incurred in connection with any merger or reorganization, acquired fund fees and expenses, and extraordinary expenses such as indemnification and litigation, or any other similar expense (Excluded Expenses). The Adviser at its sole discretion may pay, reimburse or otherwise assume such Excluded Expense(s), in which case such Excluded Expense(s) will be subject to recoupment by the Adviser pursuant to Paragraph 3 hereof. |
1
For purposes of this Paragraph 2, the term acquired fund fees and expenses means the indirect fees and expenses that a Fund incurs as a result of investing in the shares of other investment companies. |
3. |
Recoupment . The Adviser retains its right to recoup from each Fund the full amount of any Reimbursement waived or paid by the Adviser to the Fund pursuant to this Agreement, provided that such recoupment is made within three years of the Reimbursement and the recoupment does not cause the relevant Funds Total Annual Fund Operating Expenses to exceed the lesser of (i) the Funds Annual Limit at the time of the Reimbursement and (ii) the Funds Annual Limit at the time of the recoupment. |
4. |
Term . The Annual Limit shall be in effect for each Fund until the termination date indicated on Appendix A, unless sooner terminated as provided in Paragraph 5 of this Agreement. |
5. |
Termination . This Agreement may be terminated at any time, and without payment of any penalty, by the Board of Trustees of the Trust (Board), on behalf of one or more Funds, upon notice to the Adviser. This Agreement may not be terminated by the Adviser, on behalf of one or more Funds, without the consent of the Board. This Agreement automatically will terminate with respect to a Fund if the Investment Advisory Agreement is terminated with respect to such Fund, with such termination effective upon the effective date of the Investment Advisory Agreements termination. No shareholder approval is required to terminate or amend this Agreement. |
6. |
Assignment . This Agreement and all rights and obligations hereunder may not be assigned without the written consent of the other party. |
7. |
Severability . If any provision of this Agreement shall be held or made invalid by a court decision, statute or rule, or shall be otherwise rendered invalid, the remainder of this Agreement shall not be affected thereby. |
8. |
Governing Law . This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without giving effect to the conflict of laws principles hereof; provided that nothing herein shall be construed to preempt, or to be inconsistent with, any applicable federal law, regulation or rule, including the Investment Company Act of 1940, and the Investment Advisers Act of 1940, and any rules and regulations promulgated thereunder. |
9. |
Amendments . The parties may amend Appendix A to this Agreement from time to time to add or delete Funds and, subject to Paragraph 5 hereof, update the termination date of the Annual Limits with respect to a Fund by including such changes in an updated version Appendix A. |
10. |
Binding Effect . A copy of the Certificate of Trust establishing the Trust is on file with the Secretary of The State of Delaware, and notice is hereby given that this Agreement is executed by the Trust on behalf of the Funds by an officer of the Trust as an officer and not individually and that the obligations of or arising out of this Agreement are not binding upon any of the Trustees, officers or shareholders individually but are binding only up on the assets and property belonging to the Funds. |
2
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed.
DIREXION SHARES ETF TRUST | RAFFERTY ASSET MANAGEMENT, LLC | |||||
By: |
/s/ Daniel D. ONeill |
By: |
/s/ Daniel D. ONeill |
|||
Name: | Daniel D. ONeill | Name: | Daniel D. ONeill | |||
Title: | Chief Executive Officer | Title: | Managing Director | |||
Date: | 9/1/2017 | Date: | 9/1/2017 |
Dated: May 20, 2009
Amended and Restated: November 26, 2013
Amended and Restated: November 24, 2015
Amended and Restated: August 23, 2016
Amended and Restated: August 24, 2017
3
POWER OF ATTORNEY
Each of the undersigned officers and trustees of the DIREXION SHARES ETF TRUST, a Delaware statutory trust (the Trust), hereby nominates, constitutes and appoints Angela Brickl as his true and lawful attorney-in-fact and agent, for him and on his behalf and in his name, place and stead in any and all capacities, to make, execute and sign the Trusts registration statement on Form N-1A (Registration Statement) under the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, and any and all amendments to such Registration Statement and to file with the Securities and Exchange Commission, and any other regulatory authority having jurisdiction over the offer and sale of shares of the beneficial interest of the Trust, any such Registration Statement or amendment, and any and all supplements thereto or to any prospectus or statement of additional information forming a part thereof, and any and all exhibits and other documents requisite in connection therewith, granting unto said attorney full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises as fully to all intents and purposes as the Trust and the undersigned officers and trustees itself/themselves might or could do.
IN WITNESS WHEREOF, DIREXION SHARES ETF TRUST has caused this power of attorney to be executed in its name by its Chairman of the Board, and the undersigned officers and trustees have hereunto set their hands and seals at New York, New York on this 23 rd day of May, 2019.
DIREXION SHARES ETF TRUST | ||
By: | /s/ Daniel D. ONeill |
Name: | Daniel D. ONeill, Chairman of the Board |
Signature |
Title |
|||
/s/ Daniel D. ONeill |
Chairman of the Board | |||
Daniel D. ONeill | ||||
/s/ Gerald E. Shanley III |
Trustee | |||
Gerald E. Shanley III | ||||
/s/ John Weisser |
Trustee | |||
John Weisser | ||||
/s/ Jacob C. Gaffey |
Trustee | |||
Jacob C. Gaffey | ||||
/s/ David L. Driscoll |
Trustee | |||
David L. Driscoll | ||||
/s/ Henry W. Mulholland |
Trustee | |||
Henry W. Mulholland | ||||
/s/ Patrick J. Rudnick |
Principal Executive Officer | |||
Patrick J. Rudnick | and Principal Financial Officer |
RESOLVED: that each of the officers and trustees of the Trust, hereby nominates, constitutes and appoints Angela Brickl his true and lawful attorney in fact and agent, for him and on his behalf and in his name, place and stead in any and all capacities, to make, execute and sign the Trusts registration statement on Form N-1A (each, a Registration Statement) under the Securities Act of 1933, and the Investment Company Act of 1940, and any and all amendments to such Registration Statement of the Trust, and to file with the Securities and Exchange Commission, and any other regulatory authority having jurisdiction over the offer and sale of the shares of beneficial interest of the Trust, any such Registration Statement or amendments, and any and all supplements thereto or to any prospectus or statement of additional information forming a part thereof, and any and all exhibits and other documents requisite in connection therewith, granting unto said attorney full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises as fully to all intents and purposes as the Trust and its officers and trustees itself/themselves might or could do.
/s/ Angela Brickl |
Angela Brickl |
Chief Compliance Officer and Secretary of the Trust |
Dated: May 23, 2019